Amazon On Deck:
We are big proponents on round number theory. Some figures are more important than others like 20, 50, 90 and par. As certain names grow, of course they encounter larger ones on the ascent. Below is the chart of AMZN, and it was able to CLOSE above the 2000 number for five straight sessions this month, but the last four have been unable too. A bearish engulfing candle on 7/11, and then back to back doji candles two days later suggest this name needs a pause or sideways action. Nothing goes up in a straight line, not even Amazon. The mega cap names are a bit fatigued at the moment. They will have there day in the sun again very soon, but during the summer doldrums cut the leaders some slack.
Earnings Overload Continues:
Last week we witnessed some larger cap technology names report numbers. Some were not up to par and were subsequently hit. SAP comes to mind, a best of breed European name (along with ADDYY and RACE in my opinion) that slumped more than 5% on 7/18. Others like MSFT and EBAY, more “old techs”, saw initial gains fritter away as the sessions rolled on. Both of the aforementioned names recorded filled in black candlesticks, MSFT at the round 140 number and EBAY at the 40 figure last Friday and Thursday. The intraday highs for each should prove difficult to trade above going forward. Of course this week the onslaught goes on with FB GOOGL XLNX PYPL TWTR and INTC releasing numbers. Should be an interesting week.
The semiconductors continue to perform well after hibernating for between last March and the beginning of 2019. The SMH is following through past its cup with handle breakout from a 116.06 pivot on 7/18. Marching higher seems to be the direction for this group, and a plethora of names are coming to the forefront to join the party. One such stock is LRCX, and how it appeared in our 7/19 Technology Note. It roared past a bullish ascending triangle pivot of 195 and is keen to keep moving northward. The next stop seems to be a challenge to move past a cup based pivot of 209.60.