What Are Amazon, Alphabet, Tesla, and Biotech Saying About Stock Prices

Warning Signs?

 

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To the casual observer, today’s market action seemed to be innocent enough. After all the S&P 500 ($SPY) finished down by 40 bps, which is certainly nothing to be alarmed over. Afterall, the S&P 500 just closed at record levels on Friday. But a few undercurrents have caught my attention over the past day or two that have put me on alert

Technology Warnings?

The technology sector is one for sure, as measured by the Technology Select Sector SPDR ($XLK). The ETF continues to trade above its trading channel. The best case scenario is that the ETF just trades sideways back into the channel, which could quickly happen and would take no more than few days to occur. Conversly, it could fall hard, and push to the lower bounds of the range.

The ETF was down about 50 bps.

Technology XLK Stock Price

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Alphabet Sloppy Trading

Alphabet ($GOOGL) shares traded very poorly today, with shares of the stock down nearly 2 percent closing at $985. Again this stock also set a new high just last week around $1,010. So is this a panic, absolutely not. The thing that I continue to fear the most with the chart of Alphabet is the gap created after first quarter results, and has yet to be filled.

Alphabet Googl Stock Price

Amazon Struggles

Amazon also traded poorly today, with the stock down by nearly 1.7 percent. If you are wondering why the XLK was only down 50 bps, while Amazon and Alphabet declined nearly 2 percent each, it is because Amazon is not in the XLK, it is in the consumer discretionary ETF ($XLY), with its monstrous weighting of 15 percent.

amazon amzn

These two stocks surely didn’t trade like companies expected to report strong number in just three days time.

Tesla Too

Tesla shares were no different, with shares falling by over 2 percent.

tesla tsla

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Biotech

Biotech also continues to trade poorly, with the NASDAQ Biotech ETF  ($IBB) falling to roughly $327, 1.22 percent.

biotech biotechnology ibb

Alert?

When we put all of these little pieces together, one has to wonder if there is a de-risking event going on at the moment. Are investors lightening up on some of these big gainers and taking profit. Or are they lightening up before results?  All of these stocks and sectors are the among the best-performing stocks of the year and it would make sense if there was profit-taking going on.

These stocks and sectors should continue to be monitored carefully. They are market leading stocks and sectors, with the ability to set the tone, and can be used to judge the mood of the market.

One day does not make a trend, but it doesn’t mean you shouldn’t be on alert.

Thematic Growth Investment Portfolio – IB Asset Management Mott Capital Management uses a long-term thematic growth approach to investing in equities. We search for investments that both reflect and help to shape…

 

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Michael Kramer and the clients of Mott Capital own shares of GOOGL, TSLA

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.

 

Tags: Alphabet, Amazon, Technology, Biotechnology, Tesla

 

 

 

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