Market Overview

January's Market Bounce Resulted In Some Unexpected Retail Trading Trends

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January's Market Bounce Resulted In Some Unexpected Retail Trading Trends

Charting its fourth consecutive monthly drop, January’s edition of TD Ameritrade’s Investor Movement Index (IMX) reached a new nine-year low of 4.28, a 2.95-percent difference from the index’s December score of 4.41.

The declining sentiment comes as the market continues to dig out from under the losses it sustained in the final, volatile months of 2018, gaining an impressive 7.73 percent over the course of January. Although TD Ameritrade clients were net buyers of equity overall, purchasing was light, which the brokerage attributes to a decrease in CBOE’s Volatility Index to near three-month lows

New Lows Were A Buy Signal In Big Names

If there was one lingering effect of the year-end sell-off, it was that high profile large- and mega-cap stocks were at a rare discount. Investors took advantage of this weakness by propelling several performance growth stocks to the top of their buy lists.

Among these were Apple Inc. (NASDAQ: AAPL) and Amazon.com, Inc. (NASDAQ: AMZN), which both entered January near 52-week lows. They finished the month in a stronger fashion, both reporting positive earnings surprises. While Amazon managed to retake its pre-December levels on the back of bottom-line numbers that far exceeded expectations, Apple still finished January more than 25 percent below its most recent high.

However, not all of the big-equity net buys were performance stocks. Early-year bounces in less volatile names like Ford Motor Company (NYSE: F), General Electric Company (NYSE: GE) and AT&T (NYSE: T), which all hit multi-year lows in December, prompted investors to take or add positions in these long-neglected stocks.

See Also: TD Ameritrade's Investor Movement Index Highlights Grim Grinning Outlook For 2019

Selling Off M&A And Social Media Backlash

January’s market-wide upswing also marked an opportunity for investors to lighten their portfolios of some of January’s early outperformers.

Biotechnology companies Celgene Corporation (NYSE: CELG) and Gilead Sciences Inc. (NASDAQ: GILD) were both net sold in the month after it was announced at the start of the year the former was being acquired by Bristol-Myers Squibb Co. (NYSE: BMY), an announcement that caused prices to jump in stocks throughout the sector.

On the other end of the selling spectrum, social media concerns Twitter Inc. (NYSE: TWTR) and Facebook, Inc. (NASDAQ: FB) were net sold through the month amid some extra volatility and continued negative press surrounding privacy and data breaches. This caused many investors take profit in the bullish market conditions. Strong financial results Facebook at the end of the month caused the stock to spike while Twitter’s equity experienced a modest bump going into February.

For a complete breakdown of TD Ameritrade's IMX as well as a historical look at the index, you can read the full report here.

Posted-In: IMX Investor Movement Index TD AmeritradeNews Psychology Markets General Best of Benzinga

 

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