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Turning Point Analytics utilizes a time-tested, real-world strategy that optimizes the clients entry and exit points and adds alpha. TPA defines each stock as Trend or Range to identify actionable inflection points.
How To Avoid Sad Performance For The Rest Of 2020
For the past 4 months, TPA has been telling clients to stick with the winners. It has been a good strategy, riding the wave of those stocks that either benefit or are less harmed by Covid-19 and its ramifications. In this World Snapshot, we will get more granular.
Yesterday’s GDP number was horrendous, underscoring the profoundly difficulty of the current situation. The 70-year GDP chart below shows the worst GDP drop on record.
The dilemma: Opening the economy too fast means more sickness and death, but a careful, slow opening is historically painful. TPA continues to believe that this problem will take a long time to resolve and, therefore, the same conditions that led to winners and losers for most of the year will be with us for many more months. The smart and logical strategy has been and will continue to be to stick with the winners.
Stick With Nasdaq For Performance
The relative performance chart below of the Nasdaq 100 and the S&P500 shows that the right place to be has been the TECH-heavy NDX. The NDX is up 22.70% YTD, while the S&P500 is up 0.48% YTD.
TPA clients should focus on the NDX 100 to find stocks to won. TPA ranked all stocks in the NDX 100 in the table at the bottom of this report. The average YTD performance for the top half of the NDX was 54.09%, while the average YTD performance for the bottom half of the NDX 100 was -6.04% (less than the S&P500). The logical conclusion, in a world that must live with the pandemic for months to come, is to focus on the top ½ of the NDX 100.
The table below shows the prevalent sub-industries for the Happy stocks in the NDX 100 (top half) and the Sad stocks in the NDX 100 (the bottom half). Again, the Happy groups are where TPA clients should focus for their longs.
The stocks below are high conviction longs for TPA clients. These are stock that:
- have already proven themselves in the Pandemic environment
- either benefit from or are less harmed by the economic shutdown
- are in a consistent, well-formed technical uptrend
Not only are these stocks proven 2020 winners, they are also less risky in the current environment.
Jeff Marcus founded Turning Point Analytics (TPA) in 2009 after 25 years on trading desks and 13 years as a head trader to provide strategic and technical research to institutional clients. Turning Point Analytics (TPA) provides a unique strategy that works as an overlay to clients’ good fundamental analysis. After 10 years of serving only large institutions, TPA now offers its research services to mid and small managers, RIA’s, and wealthy sophisticated individuals looking for a way to increase their returns and outperform their peers.