Stock Investing: Nvidia, Meta And More Administer A Wake-Up Call To Investors

MSNBCTV-STAFF July 26, 2024

1 7 minutes read

The Magnificent Seven stocks in particular and the stock market in general have experienced the good, the bad and the ugly on Wall Street in recent years. Alternating bull and bear markets, as well as the still-ongoing artificial intelligence boom, continue to reinforce the need for a strategy on how to invest amid changing market trends. Recent chart action in Nvidia (NVDA), Microsoft (MSFT), Tesla (TSLA), Apple (AAPL), Meta Platforms (META), Alphabet (GOOGL) and Amazon (AMZN) only emphasizes that reality.

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Meta stock sank below its 50-day moving average on July 17 while Nvidia stock failed to hold support at its 21-day exponential moving average. Nvidia has since dropped below its 50-day line as well, although it remains on a recent list of 24 “perfect” stocks. The recent volatility has investors cautious, while analysts remain bullish on the AI chip juggernaut.

Microsoft, Amazon and Google stock have also lost support at their 50-day lines. Apple trades above that line, but recently lost support at its 21-day line. Meanwhile, a multiyear slump for Tesla stock continues to test investors. The EV giant just got a fourth downgrade following lackluster earnings.

Such action within a bull market reminds investors to stay flexible and focused on risk management. In addition to keeping an eye out for new opportunities by following rules for how to buy stocks, always heed rules for when to sell stocks to lock in profits as well as cut short any losses.

Remember that one key to successful stock investing is to make sure you have a sound — and doable — routine for investing in stocks in good times and bad.

Also regularly monitor IBD’s recommended market exposure level, which recently got a second reduction to 40% to 60%. This five-tiered system helps investors understand how aggressive or defensive to be at any given time.

Nvidia, Apple Put 8 ‘Secrets’ Of Selling In Focus. No. 2 Is Key.

How To Invest Using Time-Tested Rules

Backed by time-tested rules for when to buy, sell and hold, this three-step approach can help you navigate whatever the market indexes do. Depending on current market conditions, you’ll see how these rules and this routine apply to stocks like Nvidia, Apple, Tesla and other leading growth stocks.

The same guidelines outlined in this routine can teach you how to invest in IPOs to buy and watch. So while tracking household names like Microsoft stock and Apple, use this same approach to monitor IPO Leaders.

The number of stocks currently on the IPO Leaders screen has dropped to seven, with Arm Holdings (ARM) and Cava (CAVA) among the recent cuts from this stock screen. Dutch Bros (BROS), Nu Holdings (NU) and Samsara (IOT) are among those still standing.

The routine below walks investors through three basic steps to help you grow and protect your money. And you’ll find the screening tools and stock lists you need to quickly and confidently follow those steps.

Investing in stocks based on sound rules and stock ratings will help you stay profitable, protected and prepared in any market environment.

Find And Track The Best Stocks To Buy And Watch

This three-step process also helps you track and handle strong market uptrends, as well as bear markets, choppy periods and times of sector rotation. This is vital in learning how to invest successfully. During bullish as well as bearish cycles, growth stocks, tech stocks, energy plays, retailers, industrials and other sectors will come in and out of favor on Wall Street.

Tesla, Google, Apple, Meta and Nvidia are just five examples of highly watched stocks that have gone through roller-coaster rides in recent years.

One key to gauging strength or weakness in the stock market indexes and individual stocks is to see how they behave around their 50-day and 10-week moving averages. Are they finding support or hitting resistance?

To monitor how aggressive or defensive you should be at any given time, be sure to monitor IBD’s recommended market exposure level. The current recommended exposure level stands at 40%-60%.

Monitor Stock Charts

Another key to stock investing is learning how to read stock charts. While checking the general stock market trends, be sure to also track chart patterns in individual stocks as part of this routine. This helps you identify buy points and buy zones for potential and recent breakout stocks.

Watching such technical analysis also helps you avoid getting swayed by any hype or hysteria in the headlines. This approach helps you stay grounded. It also helps keep your investor psychology in check, and stay focused on what the market and leading growth stocks are actually doing.

Also, keep in mind that the stock market direction can change quickly — for better or worse. And there will be times when certain sectors, such as growth and tech stocks, perform poorly while others show strength.

To zero in on the best stocks to buy and watch that fit your investing criteria, use the IBD Stock Screener to browse preset lists or build your own custom screens.

Study Stock Charts To Find Top Growth Stocks To Buy And Watch

Nvidia stock, Microsoft, Apple, Tesla and the other Magnificent Seven stocks — Meta Platforms, Amazon and Alphabet — are just a few examples of stocks that have shown exceptional performance across several market cycles. These stocks have also gone through turbulent periods of heavy selling.

To study these winners, take a look at the daily, weekly and monthly charts for these and other traditional growth stocks. (If you’re new to technical analysis, see our section on how to read stock charts.)

And if you’re looking for the best long-term investments that have weathered several volatile periods, see which stocks make the cut for IBD Long-Term Leaders. You’ll find names like Microsoft and Cadence Design Systems (CDNS) on the list.

To get started, see our coverage of current stock market trends and case studies of leading growth stocks to buy and watch with Investor’s Corner.