Investors have been net buyers of stocks for the last four months, according to brokerage company Charles Schwab. And it's no surprise that fan favorites such as AI stocks Nvidia, Super Micro Computer, Arm Holdings and Alphabet were at the top of traders' buy lists. But one of these flashed an IBD sell signal.
The trend appears in the latest Schwab Trading Activity Index, which analyzes its retail investor stock positions and monthly trading activity from its client accounts.
"The STAX score has been on the rise since November of last year, making this the fourth consecutive month Schwab clients have increased exposure to the markets," said Joe Mazzola, director of trading and education at Charles Schwab.
More clients bought stocks than sold in February, targeting mainly the tech, utilities and health care sectors and selling out of automakers.
The stocks that saw more selling to make room for artificial intelligence stocks included Walt Disney, Palantir Technologies, Marathon Digital, Ford Motor and General Motors.
Schwab Traders Gobble Up Nvidia Stock
IBD 50 and Leaderboard name Nvidia stock gapped up 3.6% on Monday to close at yet another new high, as it rides the post-earnings excitement. The Magnificent Seven AI stock is extended from its breakout in early January, which occurred several hundred points ago.
Nvidia stock gapped up in heavy volume on Feb. 22, following the company's robust January-ended quarterly report the day prior. Its results marked the third straight quarter of triple-digit percentage growth in sales and earnings. And its sales growth has accelerated for the past three quarters.
Super Micro Computer Closes Above 1,000
Super Micro Computer gapped up 18.7% in heavy volume Monday, following news it will be added to the S&P 500 index on the morning of March 18. Shares closed at a record 1,074.34. Super Micro stock hit a previous intraday peak of 1,077.87 on Feb. 16, before a bearish reversal that cost the stock nearly 400 points.
The stock has rewarded investors as it doubled since the company beat expectations for its fiscal second quarter and raised its fiscal 2024 sales guidance on Jan. 29.
The stock triggered the new Ants Indicator on the daily MarketSurge chart. The indicator appear as small black dashes above the price bars after unusually strong price and volume action over a trailing three-week period.
AI Stock Arm Holdings Starting To Tighten Up
Another IBD 50 name, Arm Holdings, has rallied since the chip designer topped its fiscal third-quarter views and provided bullish current-quarter guidance on Feb. 7. The stock gapped up nearly 48% in huge volume the next day and has held most of that surge.
The AI stock is not currently in a base but is starting to tighten up as it tests resistance around the 150 price level. Arm stock had its initial public offering on Sept. 14, at an offering price of 51 a share.
Schwab clients also heavily added chipmaker Advanced Micro Devices in February. AMD stock hit an all-time high Monday.
Google parent Alphabet was also a big addition for Schwab clients, but the stock hasn't been too magnificent lately. It has fallen apart since criticism of its Gemini AI system came out.
The AI stock gave back more than 10% from its breakout of a cup-with handle base with a 139.42 buy point, flashing a round-trip sell signal. Alphabet stock also sank more than 6% below its 50-day moving average and is testing its 200-day line. Its relative strength line is on a steep downtrend.
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