Streaming Higher: NFLX & SPOT Are Driving Communications Leadership

Communications stocks are clearly emerging as market leaders.

While Technology and Consumer Discretionary sectors dropped over 20%, Communications stocks clearly held up stronger, staying above their previous cycle highs.

When looking for leadership in the market, we want to have both absolute strength through price and relative strength against the broader market.

We need to own the things moving better than everything else if we want to beat the market over the long term.

And two of those stocks within the Communications sector that stand out today are Netflix (NFLX) and Spotify (SPOT).

Netflix (NFLX) Hits All-Time Highs

NFLX closed this week at it’s highest price point in history:

The absolute strength is there. We can see it. NFLX is trading at $1,040 per share.

Check out the incredible bullish momentum divergence as the market sold off. The financial institutions simply did not want to sell any NFLX.

Pretty remarkable considering both the S&P 500 and the NASDAQ had lost over 20% each over the last two months.

And when looking at NFLX against the S&P 500, the picture gets even clearer:

NFLX relative strength: clearly at all-time highs vs. the S&P 500.

Institutions clearly want to own this stock. That’s a winning combination in our book.

Spotify (SPOT) Nearing Fresh Highs

SPOT pressing toward all-time highs, clearly emerging as a market leader.

SPOT relative strength clearly hitting new highs versus the S&P 500.

Why Relative Strength Matters Right Now

In messy markets, finding stocks institutions refuse to sell is critical.

I’d rather own strength (NFLX & SPOT) than guess bottoms in weak sectors.

That’s how the pros do it.

And there’s a good chance both of these stocks will be absolute leaders during the next phase of a bull market.

We want to own stocks like this before everyone else does.

Join Me LIVE Tonight at 7PM EST

Tonight at 7PM EST, join me LIVE for free to see exactly how we’re trading NFLX, SPOT, and other market leaders.

If you haven’t RSVP’d yet, click here to do so.

I’ll see you tonight at 7PM EST!

Hamilton