U.S. equities mostly moved lower on Tuesday as investors reacted to the terrorist attacks in Brussels.
Technically, stocks continue to look vulnerable here as the rally out of Feb. 11 gets overextended. Breadth is eroding and major resistance levels are just overhead. There were 200 net declining issues on the NYSE on Tuesday, well below the high of near 2,000 set last week and continuing a pattern of narrowing buying interest.
For now, I continue to recommend conservative investors move to cash while the more aggressive focus on short-side opportunities such as the following three charts: Netflix, Inc. (NASDAQ: NFLX), Twitter Inc (NYSE: TWTR) and Amazon.com, Inc. (NASDAQ: AMZN).
Netflix, Inc. (NFLX)
Online streaming icon NFLX continues to be under pressure after double topping near $130 last year, as its U.S. subscriber additions have seemed to slow.
Competition is heating up, with Amazon and others getting in on the action with original content. Shares are still stalling near the $100 level, with a break of the 20-day moving average and a test of the February low looking likely.
As a result, I have recommended the April $95 NFLX puts to my Edge Pro subscribers.
Twitter Inc (TWTR)
TWTR shares continue to languish below their 50-day moving average. They have been on the decline since early 2014 amid growing doubts about the company’s user engagement and business model. Fresh lows near $14 a share were set back in February.
The company will next report results on April 26, with analysts looking for earnings of 10 cents per share on revenues of $607.9 million.
Amazon.com, Inc. (AMZN)
Online retail giant AMZN topped in December and has been on the slide ever since on disappointing earnings and questions about the company’s rapid spending and device flops such as the Fire Phone. With shares testing below their 200-day moving average, watch for a test of the February low near $480.
Already, the April $560 AMZN puts I’ve recommended to Edge Pro subscribers have been trimmed for a 50%-plus profit.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
