Apple Of My Eye:
We often call AAPL a proxy for the Nasdaq, as it is the benchmarks 2nd largest component at almost 7%, just behind Microsoft. Therefore it obviously carries clout, and it should be watched closely as it has a big impact on the overall markets. The 215 level has been an impenetrable wall for the stock seeing several reversals at that level since early May. There is not much to do here, but wait until a possible bullish ascending triangle is taken out. The last 2 times the top of the pattern was touched near the 215 handle, it registered a 45 point decline in the month of May alone and a nearly 30 point drop top to bottom in the beginning of this month. This will be interesting to see how this pattern plays out going into the end of the year.
Patience Wearing Thin:
We continue to monitor the IGV for any clues that it may be attempting to display its former leadership qualities. Bulls will have to wait a bit longer, and time is of the essence. The chart of the ETF is starting to resemble a bear flag, and it has now CLOSED below its 50 day SMA for 13 consecutive sessions. It is a modest 7% off most recent 52 week highs, but volume trends are soft, with just 2 weeks of accumulation in all of 2019 thus far (weeks ending 2/1 and 6/7 that rose 2.6% and 3.7% respectively). The IGV is still higher by 23% YTD, but past leaders are starting to show some cracks. ZS the most notable fell 11.3% on 8/19 in the second largest daily volume in 14 months, undercutting its 50 day SMA decisively.
As we have discussed plenty in the last few weeks, is the weak action in the software group. The undisputed leader within technology continues to look a bit fatigued. Below is the chart of a former leader in VEEV and how it appeared in our 8/16 Technology Note. The stock now trades 11% off most recent 52 week highs, and has made little overall headway higher in the last 3 months. Leaders will often not need that amount of time to compose themselves before resuming their uptrend. The pivot has not been breached but this should be on a watchlist. A possible 4 week losing streak depending on Fridays CLOSE looms, and consider it did not record a 3 week losing streak prior to the current one since March-April in 2018.