The Nasdaq 100 continues to gain ground, seeing its best day since November on Tuesday after entering a correction last week.
The MTUM momentum ETF climbed 5%.
John Petrides, portfolio manager at Tocqueville Asset Management, told CNBC’s “Trading Nation” that the rebound is healthy, pointing to the previous shift that happened at the end of last year.
“In 2020, it was growth, tech and momentum that led the markets, and really from November on, it’s been a reversal into value, dividends and quality,” Petrides said Tuesday.
He was also optimistic about the long-term prospects for growth.
“By this rotation in and out between value and growth, you’re having a horizontal construction of the board that is broadening out, which is an overall bullish sign for stocks in the long term,” Petrides said.
Tesla, another name popular among momentum traders, surged nearly 20% in Tuesday’s session.
Todd Gordon, founder of TradingAnalysis.com, attributed the move to the company’s growth prospects.
“Technologies set themselves so far ahead. The gains are astronomical,” he said in the same “Trading Nation” interview. “Revenue is about $31.5 billion this year, going to be $48 [billion] on projections for next year.”
Gordon also noted recent confidence in Tesla’s innovation from Cathie Wood, founder, CEO and CIO of Ark Investment Management, as a potential catalyst for further momentum.
“If [Tesla CEO] Elon [Musk] can link their fleet of passenger cars and maybe a taxi service, I think the autonomous game might be over,” Gordon added. “I think that’s why Tesla’s trading with such a high PE.”
Tesla trades with a 153 times forward price-earnings ratio, far above the S&P 500‘s 22 times multiple.
Disclosure: Gordon holds TSLA.
