Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Capturing the Momentum Phenomenon – Nvida vs Tesla

by February 19, 2024
February 19, 2024
Capturing the Momentum Phenomenon – Nvida vs Tesla

The momentum phenomenon has been a fixture in the US equity markets for decades. There are two types of momentum to consider: absolute momentum and relative momentum. Absolute momentum refers to the underlying trend, up or down. Relative momentum quantifies the strength of the uptrend and compares it to other stocks in the index. A dual-momentum strategy uses both types of momentum to trade the strongest stocks in an index. Let’s look at two examples.

The chart below shows Nvidia (NVDA) with its 200-day SMA on the price chart and the Percent above MA (1,200,1) in the indicator window. NVDA moved above its 200-day SMA in January 2023 and remains well above this long-term trend indicator. Absolute momentum is bullish, which means the stock is in an uptrend.  

We now need to quantify the strength of this uptrend. The indicator window shows the percentage difference between the close and the 200-day SMA. This indicator gives us a “number” we can use to measure the uptrend and compare performance. For example, the close was 20.38% above the 200-day SMA on December 7th. Percent Above MA is one of 11 indicators for the TIP Indicator Edge Plugin (here)

The next chart shows Tesla (TSLA) for a comparison. TSLA was also above its 200-day SMA on December 7th and in an uptrend (absolute momentum). Relative to NVDA, however, TSLA was not as strong because it was only 7.95% above its 200-day SMA.

I chose December 7th because that is when the Composite Breadth Model at TrendInvestorPro turned bullish and our momentum strategies became fully invested. We run Dual Momentum Rotation Strategies for Nasdaq 100 and S&P 500 stocks. Both strategies chose NVDA as one of the ten stocks for their respective portfolios.

These strategies performed very well from early December to mid February with big gains coming from AVGO, CRWD, PANW, LLY, META and NVDA. Like the broader market, these strategies are extended and ripe for a pullback (drawdown). I am not looking to time a pullback or drawdown, but would note that drawdowns can provide opportunities to enter strategies. Click here to learn more about our strategies and see detailed performance metrics.

/////////////////////////////////////////////

0
FacebookTwitterGoogle +Pinterest
previous post
Office Tables for Personalized Workspaces in the Philippines
next post
UK Statistics Watchdog Rebukes Treasury Ministers Over Tax Cut Claims

You may also like

Four Charts to Track a Potential Market Top

May 6, 2025

Market Participation Is Dismal

May 10, 2023

Mish’s Daily: Granny Retail and Granddad Russell Dish...

July 29, 2022

Going, Going, Gone: End of Week Themes with...

January 14, 2023

It’s been a long time Mr Bear, where...

August 2, 2024

First the Fed; Then Focus on Sectors Where...

July 24, 2023

This Key Resistance Level is Crucial for the...

November 6, 2023

Finance Sector Leads as Bank SPDR Extends on...

February 7, 2025

The Fed Needs to Act Soon; Stocks Slip...

March 20, 2023

META Stock in Limbo: What You Need to...

April 19, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Gabbard moves presidential daily intelligence brief staff from CIA to ODNI

      May 14, 2025
    • SMCI Stock Rebounds: Why Its SCTR Score is Screaming for Attention

      May 14, 2025
    • WATCH: RFK Jr Senate hearing disrupted by screaming protesters: ‘RFK kills people with hate’

      May 14, 2025
    • Pharmaceutical Pricing Around the World

      May 14, 2025
    • Republicans’ One, Big, Beautiful Tax Bill Needs a Makeover

      May 14, 2025
    • What Are Rollover Requirements? Sports Betting Bonuses Decoded

      May 14, 2025

    Categories

    • Business (7,958)
    • Investing (1,959)
    • Politics (15,222)
    • Stocks (3,084)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved