In a note to clients Monday, BTIG analysts warned of potential weakness in certain sectors while identifying relative bright spots.
Despite ongoing bullish sentiment, BTIG remains "tactically cautious" due to the S&P 500 trading "over 12% above its 200 DMA," a level it historically hasn't sustained for long periods.
According to BTIG, several sectors are particularly vulnerable. They highlight "industrials, homebuilders, and hotels" as experiencing "relative breakdowns." This suggests these sectors are underperforming the broader market.
In contrast, BTIG sees potential in medical devices. They point to the sector "trying to bottom in relative terms," indicating it may be nearing a turnaround point relative to the market.
With the technology giant Nvidia (NASDAQ:NVDA) undergoing a stock split, which BTIG views as a potential "negative inflection point," they recommend investors keep an eye on Apple (NASDAQ:AAPL) as it attempts "to break out of a multi-year range."
Overall, BTIG advises caution in the current market environment while identifying potential opportunities in select stocks, particularly within medical devices, while recommending avoiding industrials, builders, and hotels.