Since we'll also see earnings from Google (GOOG) and Amazon (AMZN) after the close today, it's a good time to review some leading tech stock charts and follow up on some of my past posts and recent tweets.
1) BABA. As I mentioned this morning, BABA's plunge came after weeks of decline. Despite a few rallies, BABA has been making lower highs and lower lows since peaking at $120 in November. Today's move down was the second consecutive day lower on above avg. volume, and the stock sank through the psychologically important $100 level.
While there may be an upcoming relief rally, I am avoiding BABA as a long trade until the stock can find support and put in a strong base to move higher. For now, the stock remains in a downtrend.
2) AMZN. Amazon, America's great e-commerce giant (and provider of hosting, e-payments, etc.). Last time we checked in with AMZN, the stock was sailing towards new highs above the $350 level. It then peaked above $400 in early 2014 and has edged lower for the past year.
AMZN will report earnings after the close. Bulls will be hoping for a strong quarter to help turn around its recent EPS losing streak. Prior lows near $283 may provide some support, but the stock is still trending lower and could easily violate these levels. A move above this recent downtrend line and back above the $340 level might signal a change in trend.
3) GOOG. Google will also report earnings after the close. Like AMZN, it peaked out in early 2014 and has drifted lower since.
While betting against Google has never been a good long-term strategy, the intermediate trend remains weak. GOOG is currently trading below its 50 and 200 day moving averages (see daily chart).
4) PCLN. Priceline will report earnings next month. Just wanted to point out another high-dollar tech leader that's drifted lower off its early 2014 highs. See a pattern with this group?
Potential support at the $780 - $800 level may come into play if the stock continues lower.
5) AAPL. Apple is the one consumer tech leader that is showing strength here. After a blowout quarter and the usual gushing over the piles of cash Apple makes, it's clear the notion that "Apple's best days are behind them (post-Jobs)" are being put to rest.
I will consider AAPL as a long trade in the coming days. Probably should have acted on the bullish turnaround view earlier (May 2014 tweet).
6). GPRO. GoPro is down considerably from its October 2014 highs near $98.
Hopes for a big Christmas rally in GPRO shares did not materialize, and the stock is trading below its 20 and 50 day moving averages. While the pattern of lower highs and lower lows persists, I will not go long GPRO. Note: GPRO reports earnings next week.
To sum up, much of the current action in these tech leaders is bearish. The exception being AAPL, trading near an all-time high. With earnings season volatility upon us, it's best to be highly selective and manage your risk.
Disclosure: Watch list review. No positions in stocks mentioned at this time. May initiate positions any time after, do your own due diligence.
