It’s time for investors to rotate, with opportunities down the market cap – Piper Sandler
Feb. 12, 2025 11:09 AM ET
By: Monica L. Correa, SA News Editor
With the major indices remaining in uptrends despite headline volatility, Craig W. Johnson, chief market technician at Piper Sandler, said investors should continue to see buying opportunities “for down-cap stocks, especially in value.”
The major indices have, however, fallen on Wednesday as the latest inflation report came in stronger than expected. The S&P 500 ( SP500) is currently -0.48%; the Nasdaq Composite ( COMP:IND) is -0.33%; and the Dow Jones Industrial Average ( DJI) is -0.6%.
Nonetheless, from a month ago, those indices are up 4.16%, 3.44%, and 5.17%, respectively.
“Despite the increased headline volatility surrounding earnings, inflation, and tariff concerns, we believe now is not the time for investors to retreat — instead, it is time to rotate,” said Johnson, in a note. “We continue to see buying opportunities for ‘down-cap’ stocks, especially in ‘value.’”
The Russell 2000 ( RTY) is up 2.9% from a month ago, and about 2.4% from five days ago and 1% down today.
It has “pulled back from overhead resistance near 2,325/50-day moving average,” said Johnson. Its relative strength index has “eased to the midline. Add to positions on a confirmed topside breakout.”
Most overbought stocks, as of Tuesday:
- Doximity Inc. ( DOCS) – Relative strength index: 87.85
- Spotify Technology ( SPOT) – Relative strength index: 86.88
- Cloudflare Inc. ( NET) – Relative strength index: 85.50
- Intra-Cellular Therapies ( ITCI) – Relative strength index: 83.73
- Accolade Inc. ( ACCD) – Relative strength index: 83.19
- Boston Scientific Corp. ( BSX) – Relative strength index: 83.13
- Teladoc Health ( TDOC) – Relative strength index: 82.47
- Meta Platforms ( META) – Relative strength index: 80.22
- Pinterest Inc. ( PINS) – Relative strength index: 80.08
- Hims & Hers Health ( HIMS) – Relative strength index: 80.07
Most oversold stocks, as of Tuesday:
- Skyworks Solutions ( SWKS) – Relative strength index: 15.99
- Pliant Therapeutics Inc. ( PLRX) – Relative strength index: 18.16
- Leap Therapeutics ( LPTX) – Relative strength index: 19.55
- Manhattan Associates ( MANH) – Relative strength index: 20.03
- CARGO Therapeutics ( CRGX) – Relative strength index: 20.43
- Illumina Inc. ( ILMN) – Relative strength index: 20.54
- PVH Corp. ( PVH) – Relative strength index: 20.84
- Virtus Investment Partners Inc. ( VRTS) – Relative strength index: 21.08
- e.l.f. Beauty Inc. ( ELF) – Relative strength index:
- Ironwood Pharmaceuticals Inc. ( IRWD) – Relative strength index: 21.69
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