CNBC’s Jim Kramer on Tuesday outlined a strategy for stock investors trying to navigate this week’s Nasdaq Composite slide.
The high-tech index fell 1.76% in its first two trading days, compared with a 0.6% rise in the Dow Jones Industrial Average and a modest 0.15% decline in the broad S&P 500.
The Mad Money host said he sees this rotation in tech stocks largely as a result of investors capitalizing on winning positions and placing profits in parts of the market that are lagging behind.
But it won’t last forever, Kramer said on Tuesday, pointing viewers to the cohort of tech stocks he thinks will be the first to hit the bottom. He called this group “red” and said that it is the leading place to find shopping opportunities in the industry.
“These are companies that have done absolutely nothing wrong … They reported better-than-expected top and bottom performance, forecast higher gains, but their stocks are still falling this week,” Kramer said, noting the following firms: Alphabet, Microsoft, Cloudflare, Palo Alto Networks, Roblox, AMD, and Nvidia.
“They have all fantastic things to do. I will not skimp on words: these are the names you want to buy in the first place, ”said the former hedge fund manager. “These best of the breed tend to fall before everyone else.”
Kramer said his call is based on an analysis of tech-related sales for his 40 years of Wall Street experience.
“Surprisingly, almost every time these high-fold stocks sell out, the fall lasts … three days from the start, and then they start to flatten out before soaring up again, as if nothing really happened except for a shake-up. weak arms and reloading, ”Kramer said.
“It’s a bit tricky with the holiday,” he added, referring to the close of the US stock market on Thursday due to Thanksgiving, “but these high-profile players should bottom out by Friday.”
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