The rally in NASDAQ since March 30 has been impressive. The rally in AI, Space and Semi conductor stocks has been ‘extraordinary.’
MAG7 stocks have struggled by comparison and are being re-assessed from being asset light / cash generators to being quite the opposite. Then there are the issues of SpaceX valuation and I say issues. There are many as yet unresolved and perhaps not explained.
The ‘back of a fag packet’ valuation by Elon Musk and some might say arrogance (I can only imagine the apoplexy of the Bankers, offset by the thought of the fees) where Space X is concerned accompanied by ‘reassuring’ comments from Jenson Huang that any pull back in share prices is a good thing because it’s a chance to buy are indications that cart maybe ahead of the horse these days.
Many of us will have benefitted from this extraordinary (and narrow) rally in share prices – levels which I highlighted in the case of semi-conductor names, cyber-security and software in previous posts using evidence from the Apollo signals.
Now when I look at the Apollo charts and signals I see the risks. I see (actually see) the potential upside and the risk of loss. It makes you think
So, I’ve posted a chart for NDX of the Apollo Fair Value Range. The Apollo FV Range provides the price levels that correspond to the upside and downside limits of the current risk profile for each stock / sector and / or market.
The upper and lower bounds of the range are estimated using a probability model and therefore enclose the likely distribution of the sentiment time series. As you can see it is the range in which Apollo would expect the NDX to trade.
This is not a recommendation, but as a consequence of the recent rally that FVR has expanded to the point that the upper level is 32,900, the lower level and support is 26,000. Fair Value is 29,772. Essentially where we are. It’s not as if risk is being priced in, or perhaps the market doesn’t think that is necessary.