I shorted the Medical Devices ETF in the Model Portfolio to pair along with one of its components, a long position in MDT, which is a premier albeit much less growth oriented company than many of the very richly valued components of the ETF (great stories like DXCM and ISRG come to mind, not to mention my own NARI, which is at my tolerance point). I am just balancing a bit and doing this more out of curiosity (to see how a short position will go) more than anything else.
But the concern for other markets is that up until last Friday IHI was above its SMA 200 and thus the major uptrend. Now it is making a lower low and I have got to wonder if that is a sign for others with this long-time leader cracking.
So this update is both a wider market update and an IHI specific update. For example another former leader, big Tech (QQQ/NDX) is dropping too, but within its major uptrend (above the SMA 200). With IHI going abnormal does that project for QQQ as well? It’s a concern.
As for the IHI specific side of the story, if this breakdown holds up (always a question in this whipsaw market) the measured target is around 56. At some point it will probably test the drop below support (now turning to resistance) in the 61s. If this and others start doing more of this kind of thing we’d be looking at a significant market correction. So I am going to keep my eye on charts like this. It was one thing for the obviously over-valued story stuff in ARKK and the Cloud to go bearish but this would be quite another.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the technical parameters are already noted. These updates are meant as a starting point for your further research if interested. I will not personally buy every item highlighted and will sometimes sell (ref. Trade Log) any item that I do buy below target (assuming I’ve not stopped out or sold for some other reason) as I often do. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.