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The Week Ahead: Starting 12/5/22
"In the end, only three things matter: how much you loved, how gently you lived, and how gracefully you let go of the things not meant for you." Jack Kornfield Nasdaq Charm: The above quote is relevant to the markets here in the last third of the sentence. Of course, there is no guarantee that the bear market action is over, but one has to be open-minded that their negative bias may be incorrect going forward. Below is the MONTHLY chart of the Nasdaq and with November ending this past Thursday and providing a MONTHLY candle, it suggests that a new "growth" phase could be upon us. At least good risk/reward exists with the CLOSE back above its upward-sloping 50-day SMA which has signaled the end of drawdowns three times prior dating back to 2016 after bullish MONTHLY candles were recorded. The range top to bottom for the Nasdaq in November was 12% and it CLOSED less than 25 handles from the highs. The bearish gravestone doji recorded in November 2021 warranted caution and could this November's hammer propose risk is back on? Time will tell.
Technology Sector Review: 12/5/22
Diamond In The Rough: Apple commands clout in the markets being the largest company in the world via market cap. What happens with the stock has dramatic effects on domestic benchmarks, and surely it is among many of the top 10 mutual and hedge fund holdings globally. Since a spirited run from 130-176 in July-August, the name has been floundering and has given back the vast majority of the move. It now has the look of a bearish descending triangle but a break ABOVE the 150 level could see a powerful move as from FALSE moves come fast and furious ones in the OPPOSITE direction. The chart below shows that would also be a break above a diamond pattern. Is the fact that AAPL is lagging behind technology an ominous sign or is the market's performance without its participation a bullish tell? Of course, we will not know that until hindsight but with the Nasdaq up 8% over the last month period with AAPL higher by just 2%, if Apple does begin to cooperate could that ignite a robust technology run? The 150 level will be a key to watch.
Technology Sector Review: 12/2/22
Dog No More? The software names have been among some of the wobbliest in the tech sector. With one month left in 2022, many are looking to put the year in the rearview mirror. Will the space be hit with year-end tax selling and see further declines? Stocks down more than 70% YTD, not a typo, include TWLO ASAN and COIN. Other larger cap names that were pulled down with the overall weight are ADBE CRWD TEAM DOCU WDAY and INTU. Looking at the MONTHLY chart below of DDOG, could this name be looked at as a turnaround candidate? Of course, only PRICE will let us know but the round 70 level has been influential in the past and will likely continue to do so. Last month it traded with an intramonth low of 66.45 but CLOSED just below 76. In May 2021 it touched the number and went on to advance 7 consecutive months. If it can stay north of 70 perhaps 2023 will look kindly on this name. Its daily chart on Wednesday recorded a bullish engulfing candle, which also filled in a gap from the 11/9 session. The bulls song theme for 2023 could be "Who Let The Dogs Out." If the level fails to hold look out below.