There’s a lot of debate about whether the recent selloff in momentum stocks (tech, biotech, healthcare, the NASDAQ, etc.) will soon come to an end, or whether it’s the start of something bigger that will extend to other parts of the market.
So far, most analysts aren’t expecting a broader market tumble.
But as David Kostin notes, the momentum stocks themselves could fall a lot further.
In his latest Weekly Kickstart note, he points to this chart, which averages together 46 times the momentum stocks experienced a drawdown since 1980.
As you can see from the blue line, this current drawdown is still less painful than average. And several have been much worse. So if you think this has to be the bottom for the stocks, then think again.