The Power Gauge Found This Stock Way Before the Nasdaq's Rebalance

Folks, the Nasdaq 100 Index's "special rebalance" is a multitrillion-dollar juggling act... In short, as I explained on Monday, stock-exchange operator Nasdaq is making changes to stay in check with its rules on diversification. [Chaikin PowerFeed]( The Power Gauge Found This Stock Way Before the Nasdaq's Rebalance By Pete Carmasino, chief market strategist, Chaikin Analytics Folks, the Nasdaq 100 Index's "special rebalance" is a multitrillion-dollar juggling act... In short, [as I explained on Tuesday]( stock-exchange operator Nasdaq is making changes to stay in check with its rules on diversification. Specifically, it's trying to mitigate what the industry calls "concentration risk." Big Tech stocks like Apple (AAPL), Microsoft (MSFT), Nvidia (NVDA), and Alphabet (GOOGL) are involved. Those four stocks combine for a whopping $8.4 trillion in market cap. But here's the catch... One company will get the most money from the selling that happens after the Nasdaq's special rebalancing. And as I'll explain today, the Power Gauge spotted it months ago... Recommended Links: [Here's What You Missed Last Night [2023 AI Race]]( Marc Chaikin helped build Wall Street, and Dr. David Eifrig is a former vice president at Goldman Sachs. With more than 90 years of combined investing experience, they both agree: AI is a double-edged sword that could either make or break your wealth... but most people don't know the real story! That's why they joined forces last night to cut through the hype and answer all your burning questions about what AI could mean for you and your money in 2023. [Click here to tune in now]( (includes three free stock predictions). [A Massive Wave of Bankruptcies Is Coming]( While the stock market hums along, a much bigger (and more important) market is flashing a huge warning. It's one that will definitely affect stocks... housing... and the entire economy. Ignoring this signal would be a big mistake. But billionaires (and some of the world's best analysts) LOVE this kind of turmoil. That's because it's a chance to buy world-class investments for pennies on the dollar. The same setup led to 772% gains in 2009. [Get the full story here](. I'll get right to it... The stock that stands to benefit the most is semiconductor maker Broadcom (AVGO). Broadcom is already surging ahead of next week's special rebalance. It's up around 47% since May 2. Meanwhile, the S&P 500 Index is only up about 11% over that span. The reason for that massive outperformance is simple... According to a report from investment bank Goldman Sachs, the stocks that will benefit the most rank in order. Remember, the Nasdaq 100 is a market-cap-weighted index. That means the biggest stocks get the largest weightings within the index. Here's the kicker... Broadcom is the highest-weighted stock that won't get reduced in the special rebalancing. The stock's weighting in the Nasdaq 100 came in at 2.4% before the announcement earlier this month. When the special rebalancing occurs next week, its weighting will rise to 3%. Now, an increase of less than a percentage point doesn't sound like much. But it represents about $16 billion. And it equals 65% of Broadcom's three-month average trading volume. So in that context, it is a lot. But the thing is... The Power Gauge saw Broadcom's potential way before the Nasdaq announced its special rebalancing. Regular readers know our process at Chaikin Analytics starts with the Power Gauge. It rates more than 5,000 stocks and exchange-traded funds from "very bullish" to "very bearish." The Power Gauge rating is fundamentally weighted. It assesses every company in terms of factors like debt-to-equity ratio, price-to-sales ratio, earnings surprise, and return on equity. But that isn't all it does... Our system combines fundamental and technical information as well. That allows us to dissect an opportunity when both the fundamental and the technical indicators line up. And that's exactly what happened with Broadcom at the end of last year. Take a look... [Chaikin PowerFeed] As you can see, the Power Gauge consistently rated Broadcom as "neutral" or "bearish" starting in April 2022. But then, our system turned "bullish" on the stock on December 9. Broadcom closed at roughly $545 per share that day. Earlier this week, the stock hit an all-time high of more than $910 per share. That's an incredible return of about 67% in a little more than seven months. Put simply, with the Power Gauge at your side, you could've found this opportunity long ago. You would've been ready to act way before the Nasdaq's rebalancing was even announced. Now, thanks to the esoteric workings of index formation, the stock still has a major tailwind behind it. So if you weren't watching Broadcom before, I recommend doing so now. The Power Gauge agrees as well. It's still "very bullish" on the company today. Good investing, Pete Carmasino Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.32% 11 17 2 S&P 500 +0.22% 183 247 69 Nasdaq -0.02% 60 34 5 Small Caps +0.42% 682 964 296 Bonds +1.13% Real Estate +1.10% 9 16 6 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Information Technology +3.37% Discretionary +2.38% Health Care +2.30% Financial +2.21% Staples +1.37% Communication +1.12% Industrials +0.73% Materials +0.51% Real Estate +0.08% Utilities -0.96% Energy -1.66% * * * * Industry Focus Aerospace & Defense Services 5 22 5 Over the past 6 months, the Aerospace & Defense subsector (XAR) has underperformed the S&P 500 by -7.56%. Its Power Bar ratio which measures future potential is Neutral, with an equal number of Bullish and Bearish stocks. It is currently ranked #15 of 21 subsectors and has moved down 4 slots over the past week. Indicative Stocks [rating] AVAV AeroVironment, Inc. [rating] AXON Axon Enterprise, Inc [rating] MRCY Mercury Systems, Inc * * * * Top Movers Gainers [rating] NTRS +13.36% [rating] T +8.48% [rating] KEY +6.54% [rating] USB +6.46% [rating] CFG +6.39% Losers [rating] OMC -10.36% [rating] IPG -7.88% [rating] ALGN -5.00% [rating] STLD -3.15% [rating] DXCM -3.12% * * * * Earnings Report Reporting Today Rating Before Open After Close AAL, ABT, DHI CSX, ISRG, PPG, SYF, UAL FCX, FITB, GPC, JNJ, MMC, PM, POOL, TFC, TRV COF KEY, MKTX, NEM WRB No earnings reporting today. Earnings Surprises [rating] UAL United Airlines Holdings, Inc. Q2 $5.03 Beat by $0.98 [rating] GS The Goldman Sachs Group, Inc. Q2 $3.08 Missed by $-0.96 [rating] USB U.S. Bancorp Q2 $0.84 Missed by $-0.26 [rating] ATVI Activision Blizzard, Inc. Q2 $1.08 Beat by $0.20 [rating] BKR Baker Hughes Company Q2 $0.39 Beat by $0.06 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2023 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. [www.chaikinanalytics.com.]( Any brokers mentioned constitute a partial list of available brokers and is for your information only. 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