It was a historic day in Washington and Wall Street on Wednesday.
When Joe Biden was inaugurated as the 46th President of the United States, the S&P 500 hit a record high. Stocks like Alphabet, Netflix, Activision Blizzard, General Motors, and Etsy have all led the way, making their own highs.
Ari Wald, Head of Technical Analysis at Oppenheimer, says these outstanding properties should continue to increase.
“You have to stick with your winners. Drive them out. Stocks that make it to new highs are a good thing,” Wald told CNBC’s Trading Nation on Wednesday. “Stocks making new highs are usually stocks that keep making new highs.”
He noted that several of these stocks are in the communications services space – namely Netflix, the Google parent alphabet, and Activision.
“That shows that there is a broader theme there. There are some portfolio tailwinds for these names,” he said.
Wald highlighted Activision’s move, pointing to its breakout above a resistance band at $ 85, the high in September 2018.
“We are seeing another breakout at this large level from over two years ago. I think this means additional gains with the strength of the sector. Activision Blizzard is looking good,” said Wald.
According to Gina Sanchez, CEO of Chantico Global and Chief Market Strategist of Lido Advisors, Netflix could also see more upside potential. The stock hit its record high on Wednesday, the day after the streaming company saw strong subscriber growth in the fourth quarter and floated the idea of share buybacks.
“Netflix really tensed its muscles considering the way it pushed its new content, which was a risky game, but to some extent they got some luck when the pandemic hit, which left a lot of people at home. ” Sanchez said in the same interview. “This is a huge challenge for Netflix, and if you watch where they are going, they will keep pushing this content game to keep growing that subscriber base.”
Netflix added 8.5 million net paid subscribers worldwide and more than 200 million paid members for the quarter ended December 31. The company saw a 31% increase in subscribers in 2020.
Now it has to show that it can hold onto that subscriber base, said Sanchez.
“You have to wonder how much this pace can hold, especially when we’re entering a reopening economy and pulling people back from work from home to the office by the end of the year. I think that will be.” real litmus test for Netflix, “said Sanchez.
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