The S&P 500 has surged over 10% in the first half of 2023, prompting discussions about the sustainability of this bull market. Investors are closely monitoring key technical indicators, particularly the weekly 200 simple moving average, which has historically acted as a reliable support level during market recoveries. As the index climbs, the focus shifts to stock performance metrics, including the number of stocks trading above their 200-day moving averages and those achieving new all-time highs.
Sector performance reveals a divergence, with energy and healthcare stocks thriving while technology and communication services lag behind. For instance, McKesson Corp. (MCK) has shown a remarkable 50% increase in 2022, contrasting sharply with the broader market’s decline. This highlights the importance of aligning stock selection with prevailing market trends rather than chasing undervalued stocks, which may continue to underperform.
Market professionals should exercise patience and wait for confirmation of a sustained bull trend above the daily 200 SMA before making new portfolio additions. This disciplined approach can enhance the likelihood of capturing significant gains in a trending market.
Source: benzinga.com