Tech giants can still go lower
The charts show that several of tech’s big names have more room to fall before reaching technically oversold levels. Two in particular may begin to lag the S&P 500.
- This is still well above the weekly chart support from the past two months at $223 and the uptrend (line a). The weekly Starc- band is at $215.35
- The relative performance, or RS analysis, is still in a very strong uptrend (line b) that goes back to early 2010. Since the end of 2009, NFLX is up 370% versus 13.9% for the S&P 500
- The weekly on-balance volume (OBV) is still holding above support, line d, but did form a short-term divergence at the recent highs (line c). A drop below the May lows will confirm the divergence and indicate a deeper pullback
- There is resistance for NFLX at $266-$277 with the weekly Starc+ band at $290.88. The midpoint in the weekly Starc bands is at $247
- There is next support for GOOG in the $500 area with the weekly Starc- band at $480.39, or 5.7% below last Friday’s close
- The RS formed lower highs in 2010, indicating that it was no longer acting stronger than the S&P 500. The break of support at line g now creates a pattern of lower highs and lower lows
- The weekly OBV broke its uptrend in early 2011, line h, and is well below its declining weighted moving average (WMA), which is negative
- There is a minor resistance at $515-$520 with stronger resistance at $530-$533 and the daily Starc+ band
- There is important weekly chart support, line a, at $169.70
- The RS analysis still looks positive, as it is in a strong uptrend, line b. The RS made new highs in May
- The weekly OBV confirmed the recent highs and closed last week just below its weighted moving average. It is still above longer-term support at line c
- There is initial resistance in the $194-$200 area with the weekly Starc+ band at $214.45. AMZN is now trading below the midpoint of the Starc bands at $194
- The RS confirmed the highs in February, but it is quite close to its uptrend, line f. A drop below last September’s lows would indicate it had given up leadership
- The weekly OBV failed to make new highs in 2011, thereby forming a negative divergence, line g
- The drop below OBV support at line h is negative. A drop in the OBV below last summer’s lows would confirm the divergence and suggest that AAPL has formed an intermediate-term top
- There is initial resistance at $335 with much stronger resistance in the $350-$355 area
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The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
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