Apple, SanDisk pulling techs down?
Both stocks have had big run-ups, helping techs move higher. But smart money may be getting out.
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 Amazon.com (AMZN) 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 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.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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