It was a historic day in Washington and on Wall Street on Wednesday.
As Joe Biden was inaugurated as the 46th president of the United States, the S&P 500 soared to a record high. Stocks such as Alphabet, Netflix, Activision Blizzard, General Motors and Etsy led the way and hit their own all-time highs.
Ari Wald, head of technical analysis at Oppenheimer, says those standouts should continue to move higher.
“You’ve got to stick with your winners. Ride them out. Stocks that make it to new highs, that’s a good thing,” Wald told CNBC’s “Trading Nation” on Wednesday. “Stocks that make new highs are usually stocks that continue to make new highs.”
He noted that several of those stocks reside in the communications services sector – namely, Netflix, Google parent Alphabet and Activision.
“That does show that there’s a broader theme there. There’s some portfolio tailwinds for those names,” he said.
Highlighting Activision’s move, Wald pointed to its breakout above a band of resistance at $85, its September 2018 peak.
“We’re seeing a resuming breakout of that big level from over two years ago. I think it portends additional gains with the sector strength behind it, too. Activision Blizzard looks good,” said Wald.
Netflix could also see more upside, according to Gina Sanchez, CEO of Chantico Global and chief market strategist of Lido Advisors. The stock hit its record high on Wednesday, a day after the streaming company reporting strong subscriber growth in its fourth quarter and floated the idea of share buybacks.
“Netflix has really flexed its muscle if you think about how it has pushed its new content, which was a risky gamble, but to some degree, they had some luck when the pandemic hit, which was that a lot of people stayed home,” Sanchez said during the same interview. “That’s a huge pickup for Netflix, and if you look at where they’re going, they’re continuing to push this content play to continue to build that subscriber base.”
Netflix added 8.5 million global paid net subscribers in its quarter ended Dec. 31 and exceeded 200 million paid members. The company reported a 31% increase in subscribers in 2020.
Now, it needs to show that it can hold onto that subscriber base, Sanchez said.
“You have to wonder how much this pace can maintain, especially if we go into a reopening economy, and people are moving away from working from home to working back in the office by the end of the year. I think that’s going to be the real litmus test for Netflix,” said Sanchez.
