Nasdaq Surpasses 20,000, Tesla and Alphabet Lead Growth Stock Surge

Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Last week saw mostly lower indices, with the S&P 500 (SPX) losing 0.6%, snapping a three-week string of gains, while the Dow Jones Industrials was off 1.8%.

The Nasdaq Composite Index briefly surpassed 20,000 before backing off to close at 19,927, gaining 0.3% for the week. The Nasdaq’s relatively strong results from communication services sector stocks helped the index outperform its peers.

The index of U.S. large-cap growth stocks outperformed its value counterpart by a wide margin for the second week in a row, extending the growth equity style’s year-to-date outperformance. At Friday’s close, the growth index was up about 3.9% over the two-week period, while the value index was down an equal amount.

Meanwhile, the PHLX Semiconductor Index (SOX) slipped in the last trading session but is up 19.3% this year. However, that trails the gains for both the Nasdaq and the S&P 500.

The smaller-cap Russell 2000 Index recorded a second consecutive week of underperformance against the S&P 500 Index. As measured by Russell 1000 indexes, growth stocks posted a third consecutive week of outperformance versus value, thanks in part to gains in shares of Tesla (12.08%) and Google parent Alphabet (8.44%), the latter of which recorded its largest two-day gain since 2015 between Tuesday and Wednesday.

Sector performance was also largely negative, with only communication services and consumer discretionary notching gains. Some traders also noted that, while it was a relatively quiet week in terms of market catalysts, daily trading volumes outpaced the six-month average throughout the week.

With just over two trading weeks left in 2024, the S&P 500 was on track to post back-to-back annual gains of more than 20% for the first time since 1999.

As of Friday, the S&P 500’s total return was almost 27% year-to-date; in 2023, the index finished with a more than 26% return.

Year-to-date percentage gains in other indices included the Russell 2000, up nearly 16%, while the Nasdaq Composite is up nearly 33%. At this point in the overall major trend, most stocks are stretched out, and valuations are higher than historical averages. With such a mature multi-year trend that has seen a move from SPX 3,491 on October 13, 2022, to the current record high very near 6,100, the markets may be vulnerable to pullbacks or retracements.

We will need to be quite diligent and closely monitor the markets for abrupt changes in direction going forward.

In any case, we will, as usual, be Trading What We See Technically, Not What We Think.

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