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Bank of America says small investors typically become very active in the stock market during this time, which tends to boost the companies they like. The company says this seasonal effect could be especially pronounced this year because of the ongoing bull market. Here’s how to take advantage of it. Bank of America’s trading desk said the bank’s retail clients took advantage of Tuesday’s market weakness with heavy buying, during which the Dow Jones Industrial Average fell to its worst day since March 2023. did. Overall, Tuesday was more biased towards buying than selling for retail traders by more than $90. Traders said in a note that the percentage of last year’s trading sessions was. “The recent surge in speculative activity is surprising… but it shouldn’t be. And we think there is still room for action,” the trading desk said. Bank of America says this isn’t surprising since small traders receive tax refunds around this time of year and tend to put much of that money into the stock market. The tax filing period typically begins in late January or early February. Bank of America traders put together a basket of stocks with the most individual participation. This basket has outperformed the S&P 500 in each of the past four years and is on track to achieve that goal again this year. Which Stocks Small Traders Like? He takes a look at some of the stocks included in Bank of America’s list of popular proxy stocks for retail investors. Here are some of the names on the list and where analysts think they’ll go next. These retail investors may be contributing to the recent rally in some AI stocks, the note continued. Chipmakers AMD and Nvidia hold the No. 1 and No. 3 weights, respectively, among Bank of America’s retail stocks. Nvidia stock has risen nearly 19% this month ahead of its Feb. 21 earnings release. NVIDIA is currently the most owned stock on SoFi and the most mentioned stock on Reddit. And more than half of the trading volume comes from outside the exchange, the trading desk said. Retailers still love it, but Wall Street experts are starting to have doubts. The stock has gained 236% over the past 12 months, according to FactSet, and the consensus price target suggests a 7.4% decline from current levels. NVDA 1Y Mountain His Nvidia stock AMD stock in the past 12 months also doubled in the past 12 months. However, stock prices have changed this year. The stock price took a big hit after the company’s first quarter forecast fell short of investors’ expectations. The stock price has risen 19.4% since the beginning of the year, and rose about 5% in February. Analysts believe there is room for a further 5.85% rise. WINNER IS NOT GUARANTEED Granted, not every name is a winner. The company points out that individual investors also “love fishing for losers at the bottom.” Tesla is another popular retail stock, but sentiment around the stock is starting to change. Nvidia overtook the electric car maker as the most-mentioned stock on Reddit about a week ago, according to Bank of America. Shares plunged nearly 22% in 2024 as the company missed out on profits and an economic slowdown is expected later this year. Boeing is also a retail darling that has suffered from a dismal start to the year. The company is struggling with falling loose bolts found on its 737 Max 9 after the Alaska Airlines plane crash. Shares have fallen 3% this month alone and are down 21.5% since the beginning of the year. Bank of America traders think there’s still time to ride this trend. “Peak liquidity is likely still a long way off, with an average of $75 billion in refunds taking place next week and the week after, and a cumulative $100 billion in refunds over the next three weeks,” traders said. —CNBC’s Michael Bloom contributed to this report.
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