Tech takes winning position in September

Trading volume can be an effective tool for reading market opportunities
Nvidia proves moomoo Australia’s most traded stock in September
Tech stocks, on the whole, were popular with the platform’s users last month

Special Report: Leading AI-powered online trading platform moomoo reveals its best performing stocks in September as tech comes out on top.

Words by Michael McCarthy at moomoo Australia

The importance of positioning

One of the most confounding experiences for investors is when a stock or even an entire market seems to trade in the opposite direction to the news: a company releases a stronger earnings report, yet its shares drop hard; interest rates are cut, but the index falls out of bed.

In both cases it’s likely that ‘positioning’ played a part. Sometimes referred to as the third factor (after fundamentals and technicals), positioning can determine how a share price moves, at least in the short term.

When every investor who wants to buy a stock has done so ahead of a company’s widely anticipated strong earnings report, there’s no one left to buy when the report is released. Hence the stock falls, no matter how good the profit numbers.

In other words, the market bought the rumour and sold the fact.

That is one reason why some top traders study positioning, as well as other market factors. Understanding which stocks are in the spotlight and why can provide a short cut to identifying possible market opportunities.

At moomoo Australia we determine top stocks in two ways. The value of trading is one, the number (or volume) of moomoo Australia customers trading that security is the other.

Looking at both measures, the most traded stock by our clients in September to date was…

Nvidia (NASDAQ:NVDA)

The advanced chip manufacturer remains popular with traders and investors seeking exposure to the potentially high-growth AI sector.

And it’s not just Nvidia shares. Two NASDAQ-traded ETFs that track the daily performance of Nvidia are also on the hot stocks list – GraniteShares 2x Long NVDA Daily ETF (NVDL) and 2x Short NVDA Daily ETF (NVD).

These ETFs are designed for day trading, aiming to deliver a multiple of the daily performance of Nvidia shares.

NVDL aims for 200% of the performance of Nvidia on the day, while NVD aims for 200% of the inverse of the day’s trading. If Nvidia goes up 1% during a session, NVDL should be up 2% and NVD should lose 2%. If Nvidia shares fall, the reverse occurs.

Also trending

Other stocks on the list also reflect the popularity of tech stocks during September.

US-listed Apple, Arm Holdings, Google owner Alphabet, Microsoft, Intel, Lucid Group, Palantir and Sabre all made the top traded list, as did Australia’s Appen (ASX: APX). But the dominance of US stocks shows how Australian investors are turning to overseas markets to diversify through country and industry exposures.

Other US-traded ETFs to feature among the top stocks traded on the moomoo Australia platform in September include Vanguard S&P 500 ETF and iShares Core S&P 500 ETF. On the local market there’s Vanguard Australian Shares ETF (ASX:VAS) which is indexed to the S&P/ASX 300 and its MSCI Intl ETF (ASX:VGS) which provides exposure to an international share portfolio.

The semi-conductor index and the Nasdaq 100 were also popular among moomoo users (iShares Semiconductor ETF and ProShares UltraPro QQQ ETF).

Local heroes

Meanwhile, investor favourite BHP (ASX:BHP) remained on the list through sheer force of numbers of clients trading, though overall volumes and values were lower despite a rising share price.

Fortescue (ASX:FMG) featured as interest in iron ore picked up, with its status as a pure play keeping it firmly on traders’ radars.

DroneShield (ASX:DRO) steadied after a spectacular year to date. It started the year below 40 cents per share, before rocketing to $2.72. Over August and September it settled back to trade closer to $1.20 and in a narrower trading range. Despite this it remains on the most popular stocks list, though it is no longer in the top three.

Investors favour ETFs and tech in September

In summary, ETFs are still heavily in favour, whether as lower-cost investment vehicles that track an index, or day-trading instruments that can deliver multiples of the rise or fall of a share.

The different types of ETFs on the most popular list are a good reminder that investors and traders must take the time to understand the exposure any individual ETF delivers before entering a trade.

Tech stocks, particularly software as a service (SaaS) and chipmakers, are still heavily favoured by Australians. This may reflect the lack of technology offerings on the local exchange.

However, local manufacturers – whether drones or medical devices – are often in the spotlight, and resource giants are Australians’ perennial favourite.

Michael McCarthy is a market strategist at online broking platform moomoo Australia.

The views, information, or opinions expressed in the interviews in this article are solely those of the contributing author and do not represent the views of Stockhead.

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