Jayson Derrick
Investors may find it surprising that out of a portfolio of more than 4,000 stocks, only 28 percent are showing "any form of an uptrend," according to Piper Jaffray's Craig Johnson.
The Analyst
Johnson, a managing director and senior technical research analyst, was a guest on CNBC's "Worldwide Exchange" Thursday.
The Thesis
The stock market is flashing a concerning signal at a time when it is attempting to regain its all-time highs, Johnson told CNBC.
Not only are a fewer number of stocks showing upside momentum compared to prior rallies, but a much smaller number of stocks are responsible for a majority of the upside in the broader market.
The "fab five" stocks — Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Netflix, Inc. (NASDAQ: NFLX) — account for around 80 percent of the performance of the Nasdaq 100 index year-to-date, Johnson said. It's "not healthy" to have so few stocks driving the overall market, he said, adding that an earnings miss from just one of the five names could cause a setback and correction.
"From my perspective, I don't like to see the market this narrow," Johnson said.
Related Links:
A Peek Into The Markets: US Stock Futures Fall Ahead Of Economic Data
25 Stocks Moving In Thursday's Pre-Market Session
Photo of Apple's Cupertino, California headquarters by Daniel L. Lu/Wikimedia.
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