As we approach the end of the first half of 2024, it is clear that the stock market has seen significant gains. All three major indexes are poised to finish the first half with positive returns, driven by the ongoing artificial intelligence boom. The S & P 500 has surged by 15%, the Dow Jones Industrial Average is up by 5%, and the Nasdaq Composite has outperformed with an impressive 20% gain.
One standout performer in the market has been Nvidia, which has seen its market valuation soar to $3 trillion, surpassing even tech giant Microsoft at one point. Microsoft itself has experienced a substantial rise of nearly 21% in 2024, driven by its own AI initiatives and the successful rollout of Copilot. Another notable winner has been Eli Lilly, with a 57% increase in share value. The company’s focus on GLP-1 drugs and its strong presence in the Alzheimer’s and diabetes drug markets have propelled it to become the most valuable healthcare company globally.
However, not all stocks are in the green. Microsoft, despite its impressive gains, is showing signs of exhaustion and is potentially overbought according to a 14-day relative strength index reading of 74. The European Union recently accused the tech giant of antitrust violations, adding to the uncertainty surrounding the stock. Walgreens Boots Alliance and Waters Corporation are among the oversold stocks, with a 14-day RSI reading of 20. Walgreens, in particular, has faced challenges in its pharmacies and with consumers, leading to a significant pullback in its share price.
Evaluating stocks based on their RSI can provide valuable insights into their future performance. An RSI above 70 indicates overbought conditions, suggesting a potential downturn, while a reading below 30 signals oversold conditions and a possible rebound. This metric can help investors make informed decisions about when to buy or sell stocks based on market sentiment and momentum.
As we wrap up the first half of 2024, it is essential for investors to carefully assess their portfolios and consider the implications of market trends. While some stocks have seen remarkable gains, others are facing challenges that could impact their future performance. By staying informed and closely monitoring market indicators, investors can navigate the stock market with confidence and make sound investment decisions.