All Time Highs In Focus:

  • "When the facts change I change my mind, what do you do sir?" The famous quote by Winston Churchill could be relevant to recent action regarding the Nasdaq. The tech benchmark has been a laggard for 2 months, but after a brutal week last week slumping 5.5%, this week has easily erased that move and more higher by 9%. Very impressive has been another quick recoup of the 50 day SMA Wednesday, spending just 5 sessions below the line compared to the bout of 7 days last month between 9/17-25. If the index can catapult above the very round 12000 number, which has some PRICE memory their being rejected in both September and October, that in my opinion could ignite a big wave of buying. Remember the more times a line of support or resistance is touched the weaker it becomes. The mega cap names are doing a big amount of the jump higher, with GOOGL FB MSFT and AMZN each up in the 9-12% range this week so far.

"Old Tech" Bifurcation:

  • We have spoken about how difficult it is for larger, mature names to keep pace with their younger peers, and within technology there are plenty of examples. INTC still trades 34% off most recent 52 week highs, and this week is up modestly by 3.2% thus far, but doing little to recapture much of the 2 weeks prior that fell by 19%. CSCO is lower 10 of the last 12 weeks, and sits 26% off its most recent annual peak. Its bitter rival of years past JNPR (that battle is no longer relevant), I am dating myself, is fighting with the very round 20 number. Both CSCO and JNPR fell Wednesday, with a Nasdaq up nearly 4%, which could easily be a tell going forward. NCR is lower by 44% off its own most recent 52 week highs, almost unforgivable in the current climate, and is lower this week, with the Nasdaq surging displayed very weak relative strength. By contrast look how some other "old tech" names, like GOOGL AAPL MSFT AMZN and FB, have fared very well. Adapt or perish.

Recent Examples:

  • Some European tech names have been on the rise recently, and some have been in the dog house. We know that SAP was clobbered by nearly one third last week in the strongest WEEKLY volume in at least 5 years. ERIC has undergone some of its own volatility on both sides, with last week slumping 9%, and this week trying its best to recoup most of the damage there higher by more than 7% (it filled in a gap from the 10/20 session last Friday while finding support at its 50 day SMA). A stellar performer from the region could be seen in the chart below of LOGI, and how it appeared in our 10/26 Technology Note. On 10/20 it screamed higher to the tune of almost 16%, making a gap fill from the prior session look unlikely, but we suggested an entry in the 85-86 area which it did find a floor near that. This week it is higher by almost 11% and now trades just 2% off most recent 52 week highs. Expect a gravitational pull to the very round par number headed into year end.

Special Situations:

  • Semiconductor play higher by 46% YTD and 59% over last one year period. Dividend yield of .4%.
  • Higher 6 of the last 7 weeks, and this week has jumped more than 13%. Recent impressive break above a WEEKLY cup base pattern 21 years in duration, not a typo.
  • Earnings mostly higher by 4.7, 3, 3.6 and 2.6% on 10/12, 4/22, 1/23 and 10/23/19 (fell .3% on 7/22).
  • Enter on pullback after recent cup with handle breakout.
  • Entry TER 97.50.  Stop 92.

  • Software play higher by 35% YTD and 44% over last one year period. Dividend yield of .5%.
  • Name pausing near possible double top in round 80 number area from '18 and since this July. Now 9% off most recent 52 week highs, and has now recaptured all of last weeks loss of 6.5%.
  • Back to back earnings drops of 2.6 and 2.5% on 10/30 and 8/5, after consecutive gains of 6.3 and 2.1% on 5/6 and 2/7.
  • Enter with buy stop above 50 day SMA.
  • Entry ATVI 82.  Stop 78.

  • Digital services play higher by 19% YTD and 17% over last one year period.
  • Now 14% off most recent 52 week highs, and on current 3 week losing streak which lost a combined 16%. Lower 6 of the last 9 weeks, with five CLOSING at lows for WEEKLY range. Up 8% this week heading into Friday.
  • Three straight negative earnings reactions down 8.7, 1.2 and 4% on 10/28, 7/29 and 4/29 (rose 1.1% on 2/12).
  • Enter short into upside gap fill.
  • Entry AKAM 105.  Buy stop 109.

Good luck.

Entry summaries:

Buy pullback into recent cup with handle breakout TER 97.50.  Stop 92.

Buy stop above 50 day SMA ATVI 82.  Stop 78.

Short into upside gap fill AKAM 105.  Buy stop 109.

 

 

 

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All Time Highs In Focus:

  • "When the facts change I change my mind, what do you do sir?" The famous quote by Winston Churchill could be relevant to recent action regarding the Nasdaq. The tech benchmark has been a laggard for 2 months, but after a brutal week last week slumping 5.5%, this week has easily erased that move and more higher by 9%. Very impressive has been another quick recoup of the 50 day SMA Wednesday, spending just 5 sessions below the line compared to the bout of 7 days last month between 9/17-25. If the index can catapult above the very round 12000 number, which has some PRICE memory their being rejected in both September and October, that in my opinion could ignite a big wave of buying. Remember the more times a line of support or resistance is touched the weaker it becomes. The mega cap names are doing a big amount of the jump higher, with GOOGL FB MSFT and AMZN each up in the 9-12% range this week so far.

"Old Tech" Bifurcation:

  • We have spoken about how difficult it is for larger, mature names to keep pace with their younger peers, and within technology there are plenty of examples. INTC still trades 34% off most recent 52 week highs, and this week is up modestly by 3.2% thus far, but doing little to recapture much of the 2 weeks prior that fell by 19%. CSCO is lower 10 of the last 12 weeks, and sits 26% off its most recent annual peak. Its bitter rival of years past JNPR (that battle is no longer relevant), I am dating myself, is fighting with the very round 20 number. Both CSCO and JNPR fell Wednesday, with a Nasdaq up nearly 4%, which could easily be a tell going forward. NCR is lower by 44% off its own most recent 52 week highs, almost unforgivable in the current climate, and is lower this week, with the Nasdaq surging displayed very weak relative strength. By contrast look how some other "old tech" names, like GOOGL AAPL MSFT AMZN and FB, have fared very well. Adapt or perish.

Recent Examples:

  • Some European tech names have been on the rise recently, and some have been in the dog house. We know that SAP was clobbered by nearly one third last week in the strongest WEEKLY volume in at least 5 years. ERIC has undergone some of its own volatility on both sides, with last week slumping 9%, and this week trying its best to recoup most of the damage there higher by more than 7% (it filled in a gap from the 10/20 session last Friday while finding support at its 50 day SMA). A stellar performer from the region could be seen in the chart below of LOGI, and how it appeared in our 10/26 Technology Note. On 10/20 it screamed higher to the tune of almost 16%, making a gap fill from the prior session look unlikely, but we suggested an entry in the 85-86 area which it did find a floor near that. This week it is higher by almost 11% and now trades just 2% off most recent 52 week highs. Expect a gravitational pull to the very round par number headed into year end.

Special Situations:

  • Semiconductor play higher by 46% YTD and 59% over last one year period. Dividend yield of .4%.
  • Higher 6 of the last 7 weeks, and this week has jumped more than 13%. Recent impressive break above a WEEKLY cup base pattern 21 years in duration, not a typo.
  • Earnings mostly higher by 4.7, 3, 3.6 and 2.6% on 10/12, 4/22, 1/23 and 10/23/19 (fell .3% on 7/22).
  • Enter on pullback after recent cup with handle breakout.
  • Entry TER 97.50.  Stop 92.

  • Software play higher by 35% YTD and 44% over last one year period. Dividend yield of .5%.
  • Name pausing near possible double top in round 80 number area from '18 and since this July. Now 9% off most recent 52 week highs, and has now recaptured all of last weeks loss of 6.5%.
  • Back to back earnings drops of 2.6 and 2.5% on 10/30 and 8/5, after consecutive gains of 6.3 and 2.1% on 5/6 and 2/7.
  • Enter with buy stop above 50 day SMA.
  • Entry ATVI 82.  Stop 78.

  • Digital services play higher by 19% YTD and 17% over last one year period.
  • Now 14% off most recent 52 week highs, and on current 3 week losing streak which lost a combined 16%. Lower 6 of the last 9 weeks, with five CLOSING at lows for WEEKLY range. Up 8% this week heading into Friday.
  • Three straight negative earnings reactions down 8.7, 1.2 and 4% on 10/28, 7/29 and 4/29 (rose 1.1% on 2/12).
  • Enter short into upside gap fill.
  • Entry AKAM 105.  Buy stop 109.

Good luck.

Entry summaries:

Buy pullback into recent cup with handle breakout TER 97.50.  Stop 92.

Buy stop above 50 day SMA ATVI 82.  Stop 78.

Short into upside gap fill AKAM 105.  Buy stop 109.