Hovering near the 5,000-point threshold, not far from all-time highs, the S&P 500 index has surged over 20% since late October, creating a stark divide with many corporations failing to join the market rally.
As of mid-February, nearly half of S&P 500 stocks were trading below the 50-day moving average, a widely recognized technical indicator employed by traders for evaluating the short to medium-term direction of a stock’s price movement. This suggests a substantial portion of the index’s components remains ensnared by bearish sentiment, highlighting poor market breadth.
The Stats: Only 51% Of S&P 500 Stocks Is Trading Above 50-Day Moving Average
In total, 232 S&P 500 stocks currently trade below their 50-day moving averages, among which 202 have a market capitalization of less than $100 billion. The remaining 30 stocks belong to mega-cap companies, although they constitute just one-third of that exclusive group. The contrast becomes even more pronounced when considering that only five out of the top 30 companies in the index are trading below their 50-day moving average, suggesting the elite tier of the S&P 500 largely remained well shielded from bearish pressures.
Top 10 Cheapest S&P 500 Companies, According To 50-Day Moving Average
Charter Communications, Inc. CHTR, Archer-Daniels-Midland Company ADM, and MarketAxess Holdings Inc. MKTX are the three companies that trade the most “at a discount” relative to this technical indicator with distances of 20%, 19%, and 17%, respectively, off the 50-day average. None of these three corporations have a market capitalization in excess of $50 billion.
A significant surprise comes in fourth place, as Tesla Inc. TSLA is positioned there, about 16% off its 50-day average. With a market capitalization of almost $590 billion, Tesla is one of the mega-cap outliers in the group of S&P 500 companies that trade below the 50-day average. Within this group, there is Boeing Co BA, now 11% away from its moving average.
Inverting the focus to stocks that have largely exceeded the 50-day moving average’s support, NVIDIA Corp. NVDA, Meta Platforms Inc. META, and Ely Lilly and Company LLY lead the ranking, with 32%, 25%, and 21%, respectively, price premiums compared to the technical indicator. Uber Technologies Inc. UBER and Ralph Lauren Corp. RL follow closely after with a 20% premium.
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