The second quarter of 2024 has come to an end, prompting investors and traders to look ahead to the third quarter to evaluate what may be in store. A key question on Wall Street is whether the big tech stocks will continue their dominance in the coming months. Sectors like the Communication Services Sector (XLC) and Technology Select Sector (XLK) outperformed in the first half of the year, with large tech stocks leading the way.
Tech giants like NVDA have seen significant gains this year, with a wide margin of 149.5% year-to-date. Other companies like META, Amazon.com, and Microsoft have also seen positive returns, though some have seen more modest growth. Apple Inc. saw a correction low in April but has since rebounded, closing the first half of the year with a 9.7% increase.
In terms of ETFs, QQQ and SPY have also seen gains in the first half of the year, up 17.3% and 15.2% respectively. However, the S&P Equal Unweighted Index ($SPXEW) has only seen a 4.1% increase year-to-date, indicating potential divergence in the market. Analysts are closely monitoring the monthly charts and technical studies to determine outlooks for these stocks and market averages.
In the monthly chart analysis, the Invesco QQQ Trust (QQQ) showed strong performance in June and closed well above previous highs. Amazon.com (AMZN) also closed the month on a positive note, with technical indicators suggesting further potential gains. Meta Platforms (META), Microsoft Corp. (MSFT), and Apple Inc. (AAPL) also showed positive signs in their technical analyses.
NVIDIA Corp (NVDA), the standout performer so far this year, experienced a correction after peaking in June. While the stock has traded above its monthly starc+ band all year, indicating extreme strength, recent corrections have brought some uncertainty. The monthly technical studies for NVDA confirm its strong performance but investors should wait for additional positive signs before taking new positions.
Overall, analysts recommend staying with big tech positions until there are more concrete signs of a trend change. Close monitoring of technical indicators and potential negative signals, such as DTS readings, will be key in navigating the market in the third quarter. Investors should remain cautious and seek out signals of either continued growth or potential corrections in the market.
