Stocks Breaking Critical Support And Could Be At Risk Of Falling Further
The stocks market recent bout of volatility is not only exhausting but confusing as well. It started in early February on inflation concerns, it moved to rising yields, to trade war fears, to Facebook, to Amazon, and now back to trade wars. So which is it? Not sure. But it does tell us one thing. The market and buyers are extremely fragile, and the slightest bit of negative news is enough to get traders to dump their shares.
It was January 29, that I warned stocks were looking toppy going into quarterly results, and for the most part those results were strong. But yet they weren’t enough to keep equity prices from dropping. But as I had noted back then, some of the prices had gotten way ahead of themselves. After the market bottom in early February, technology stocks took off once again, with shares of Amazon and Micron surpassing their previous highs, as analysts upgraded and raised their price targets.
During the latest round of selling stocks likes Google, Netflix, Micron, Nvidia, Apple, Microsoft have managed to hold on and avoided breaking some key levels of importance. But in Friday’s commentary, I noted concerns, and cracks started emerging, and that was extremely worrisome to me.
Nvidia, which has held extremely well at $218 finally broke, and that should be a concern.
The RSI has been trending lower since peaking in mid-February over 70, and volume has been tapering off in recent days. If the stock bounces Monday and is unable to get above $219, it is likely a good sign that next move is lower to around $204.
Apple share failed at resistance around $174 moving below support at $169. If that isn’t a crack then I do not know what one is. I think downside is limited here to maybe $160ish.
Biogen shares continue to melt, with no end in sight, it might not stop falling until $250.
Incyte totally blew-up on Friday after reporting negative results on its trial for one its cancer drugs in development in combination with Merck’s Keytruda. This is just another example of why the Biotech sector has been so terrible in 2018.
It took Nektar down with it.
I still think GE is heading to a $10 handle.
Blackberry cracked and could be headed towards $10.
Microsoft held support at $91.50 until it no longer could. Not good.
Micron held $49.75 until it cracked as well.
But at least one stock is still holding on. It is the lone wolf here.
Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets
Free Articles Written By Mike:
Join our 539 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe
Michael Kramer and Clients of Mott capital own shares of NETFLIX and GOOGL
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.
© 2018 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.