Stocks slid lower on Friday, largely reversing Thursday’s rebound after a downright terrible report on producer price inflation — raising doubts over the efficacy of all the stimulus we’ve seen from the major central banks.
Both the Dow Jones Industrial Average and the S&P 500 are back below their 50-day moving averages. But given how extended investor sentiment and positioning was heading into this downdraft, further losses are likely. Market breadth also has been weak.
While energy stocks have been leading the decline, a number of popular tech stocks are succumbing to the selling pressure.
Here are five that are worth a look on the short side.
Mega-Cap Tech Stocks to Sell: Intel Corporation (INTC)
Click to Enlarge Intel Corporation (NASDAQ:INTC) was slammed 4.7% lower on Thursday — and finish about another half-percent lower on Friday — after cutting Q1 revenue guidance by about 7% citing weaker-than-expected demand for desktop PCs and lower inventory levels across the PC supply chain.
As a result, the March $33 INTC puts I recommended to Edge Pro subscribers back on March 6 are now up nearly 400%.
Any investors currently holding INTC should back away for now.
Mega-Cap Tech Stocks to Sell: Microsoft Corporation (MSFT)
Click to Enlarge Microsoft Corporation (NASDAQ:MSFT) is getting caught in the downdraft caused by the confirmation from INTC that the PC market has slowed in a big way. Analysts at Ascendiant have previously noted (and continue to say) that the rebound in PC sales in 2014 looks to have been a temporary lift caused by MSFT’s ending of support for Windows XP.
With Windows 8 far from a blockbuster, consumers just aren’t interested in upgrading. The next big hope: Windows 10.
Mega-Cap Tech Stocks to Sell: Cisco Systems, Inc. (CSCO)
Click to Enlarge Cisco Systems, Inc. (NASDAQ:CSCO) looks set for another test of its 200-day moving average as a rapid pullback in corporate earnings expectations will likely pinch capital expenditures the company relied on.
However, CSCO must shift its focus from on-site network infrastructure to a hybrid cloud-based business model.
Mega-Cap Tech Stocks to Sell: Hewlett-Packard Company (HPQ)
Click to Enlarge Hewlett-Packard Company (NYSE:HPQ) has fallen to test its October lows as pessimism grows over the health of the PC market. IDC lowered its PC market outlook for 2015, noting that worldwide shipments are expected to fall 4.9% this year vs. a prior forecast for a 3.3% decline.
Edge Pro subscribers booked a 100%-plus gain on their February HPQ put options last month.
Mega-Cap Tech Stocks to Sell: Yahoo! Inc. (YHOO)
Click to Enlarge Yahoo! Inc. (NASDAQ:YHOO) has spent the last three months riding its 200-day moving average as the shine it enjoyed during the excitement surrounding the Alibaba Group Holding Ltd (NYSE:BABA) IPO has come off. Not even rumors that BABA could buy YHOO can get the stock moving again.
The company hasn’t suffered a major breach of its 200-day moving average since 2011 — but one increasingly looks likely. In response, I am recommending an April YHOO put option position to my Edge Pro subscribers.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters.
