The Nasdaq 100 just hit another all-time high, as did the amount of people quoting the percentage of the index's gains that are from its top five components. While that makes for a good headline and soundbite, it's not really all that actionable. What is actionable is the chart below, which we spoke about in early June.

Chart showing the performance of the Nasdaq 100 Index

There are 51 stocks down since the Nasdaq 100's initial peak on Jan. 26, meaning that there is opportunity on both sides of the tape if you're so inclined. What it also tells us is that it doesn't pay to get ideological about how large components like Apple Inc. (AAPL), Amazon.com, Inc. (AMZN) and Google parent Alphabet Inc. (GOOG) have become. It's a cap-weighted index, which means that, as long as the leaders keep leading, the index is going to move higher. When their performance deteriorates, so will that of the index; it works on the way up and on the way down. It's just math.

Components of the Nasdaq 100 Index

When leaders start to falter, we'll make adjustments to our approach, but for now, we want to be trading with the trend and focusing on long opportunities in those names showing relative strength.

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This includes names like Activision Blizzard, Inc. (ATVI), which has been consolidating above a rising 200-day moving average for six months while momentum maintained its bullish range. Now the stock is breaking out to new highs, suggesting that we want to be long if prices are above $77.50 and taking profits up near $108. (See also: Gaming ETFs Take Off.)

Chart showing the performance of Activision Blizzard, Inc. (ATVI) stock

PayPal Holdings, Inc. (PYPL) is also breaking out to new highs after nine months of consolidation in which momentum never got oversold. As long as prices are above $83.50, we want to be long with a price target of $116.75. (For more, see: PayPal Seen Jumping 18% on Strong Growth.)

Chart showing the performance of PayPal Holdings, Inc. (PYPL) stock

Premium members of All Star Charts can click here for a list of other Nasdaq 100 stocks breaking out.

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