The Brexit hangover continues this week, putting a number of technically challenged stocks at risk.
But it’s not all doom and gloom as some opportunities are emerging from the fallout. Specifically, the charts of Goldman Sachs Group Inc (NYSE:GS), Apple Inc. (NASDAQ:AAPL) and Southern Co (NYSE:SO) are standing out.
Here’s what to look for today:
Apple Inc. (AAPL)
AAPL shares are once again testing what is a massively critical trendline this week as it tries to hold the $93 level mark. This price point is the site of Apple shares’ 50-month moving average. We don’t often watch monthly trendlines of this length, but there is some history for Apple stock at this moving average.
The last 40% drop in AAPL stock came in early 2013 when it broke through long-term trendlines and stopped declining as it approached the 50-month trendline, the same that we’re watching today.
We’ve seen Apple shares successfully test this trendline support four of the last five months, meaning that a significant move below the $93 mark at this point will likely see an increase in technical selling as the market gives up on this support holding Apple shares from moving lower.
Goldman Sachs (GS)
GS stock broke through critical support on last week’s trading in response to the Brexit news. Now trading at $141.86, shares have broken below what had been key technical support at the $150 level.
Goldman Sachs already was raising some questions as the company has been in the process of changing is business model away from the exclusivity of working with high net worth client and institutions. Now, we have to wait and see the effect of any Brexit-fueled changes to the banking system in the new European Union, which aren’t likely to add value.
Goldman Sachs shares will have one more support level to test before things get worse — the $134 mark is necessary to keep this stock, which is already trading in a bear market trend, from taking a leading role in the market’s decline.
Southern Co (SO)
It’s not all gloom and doom in the market; utilities and other dividend-yielding assets are getting the bid they deserve. The Brexit has just thrown any chance of an interest rate increase in the U.S. up into the air, meaning investors are going to be foraging for yields.
Southern Company, an electric utility, pays a 4.4% dividend to shareholders and is trading at a price-to-earnings ratio that’s equal to the S&P 500’s. All of this is supported by one of the stronger technical charts in the utility sector.
SO stock is one of a dwindling number of issues trading above its 50- and 200-day moving averages. On this technical strength, shares are moving through to new highs as they break through the $52 level and get ready to charge higher.
