Apple, SanDisk pulling techs down?

Both stocks have had big run-ups, helping techs move higher. But smart money may be getting out.

By Charley Blaine May 4, 2010 2:03PM

Updated at 6:40 p.m. ET


Watch techs. Watch Apple (AAPL) and SanDisk (SNDK). They're getting hit hard, and they could pull the rest of techland lower with them.

Apple was off 2.9% to $258.68 today. Apple hasn't had a 3% decline since the market pullback at the end of January and early February.

SanDisk, the maker of flash-memory chips, was down 4.2% to $41.694.

The Nasdaq Composite Index ($COMPX) was off 74 points, or 3%, to 2,424. The Nasdaq-100 Index ($NDX.X) was off 63 points, or 3.1%, to 1,969. The Power Shares QQQ (QQQQ) exchange-traded fund, better known as the Nasdaq-100 tracking stack, was down 3% to $48.43.

The Philadelphia Semiconductor Index ($SOX) is down 4.5% to 368.

This is not meant to be a litany of stocks and indexes getting clobbered, although Google (GOOG)Dell (DELL), Oracle (ORCL) and (AppleAMZN) were all off more than 3% today.
Rather, Apple and SanDisk, especially, have looked overbought and pulled the tech sector with them. That is, lots of people have been buying tech stocks, regardless of whether the prices make any sense.

Apple shares jumped 32.3% between Feb. 26 and April 23, when they closed at $270.83, with volumes running between 25 million and 30 million shares, about 40% higher than normal. SanDisk

SanDisk has had an even bigger run-up since the end of February: up 49.3%. In fact, it has been a better performer than Apple since the end of 2008. It's up 350% to Apple's 212%.

At some point, the stocks start to show some disturbing patterns. The most dangerous is the head-and-shoulders pattern. It occurs when a stock hits a high, dips, hits a new high, dips and rises again but can't move past that second high.

Technicians see that as a big-time sell signal. It happened this week with the QQQ (aka the Nasdaq-100 tracking stock.). You can see it in a chart here.

It happened with Apple as well.



Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.



Quotes delayed at least 15 min
Sponsored by:


There’s a problem getting this information right now. Please try again later.
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The major averages posted solid gains ahead of tomorrow's policy directive from the Federal Open Market Committee. The S&P 500 rallied 0.8%, while the Russell 2000 (+0.3%) could not keep pace with the benchmark index.

Equity indices hovered near their flat lines during the first two hours of action, but surged in reaction to reports from the Wall Street Journal concerning tomorrow's FOMC statement. Specifically, Fed watcher Jon Hilsenrath indicated that the statement ... More


There’s a problem getting this information right now. Please try again later.
Sponsored by: