Tepid markets are leading to opportunities and warnings for technical traders. A broad mix of stocks are beginning to splinter the correlation that the fourth-quarter rally seemed to enjoy as it felt like all stocks were rising under the optimism of the new Administration.
Today’s three big stock charts look at the technical pictures for Advanced Micro Devices, Inc. (NASDAQ:AMD), Ford Motor Company (NYSE:F) and The Coca-Cola Co (NYSE:KO) as a sample of the splintering market activity that we’re beginning to see put markets back into a trading range.
Advanced Micro Devices, Inc. (AMD)
Shares of Advanced Micro have led in the market and the sector as they have catapulted more than 475% over the last 12 months. AMD shares recently shed 20% in about a week as traders were quick to move to lock-in profits as the market started to level-off.
Advanced Micro Devices stock is now sitting directly on its 50-day moving average. This trendline has been supportive of AMD stock since March 2016.
The strong move for Advanced Micro has come on an increase in volume. In addition, the test of the trendline is also being met with an increase in volume of AMD shares, indicating that traders are seeing this as an opportunity.
Tuesday’s lows touched-down on Advanced Micro stock’s lower Bollinger Band, which acted as support. Maintaining this channel will keep AMD stock on the bull’s radar.
Ford Motor Company (F)
Ford has continued to underperform the market and it is now finding itself between a technical rock and hard place.
After what appears to be a failed attempt to transition into an intermediate-term bullish trend, F stock is once again trading below its 50-day moving average, currently at $12.53.
Making matters worse is that this price is now the confluence of the 50- and 200-day moving average, meaning that $12.50 has turned into almost oppressive resistance for Ford shares.
As if it needed to get worse, F stock only has 1.2% of room below it before it encroaches its 100-day moving average.
Having Ford break below all three of these trendlines in such a short period of time will attract the attention of technical sellers that will likely target the stock to move lower and likely break the $12 price point.
The Coca-Cola Co (KO)
Some beverage companies like Coca-Cola have been lagging the market as their models are affected by the changing trends in consumer diets. KO stock is trading 5% lower for the last twelve months and continues to lag the rest of the market.
Coca-Cola shares recently broke above their 50- and 100-day moving averages and moved with haste to resistance at their 200-day trendline at $42.75. Now, KO shares are not only suffering from that resistance, but also from a short-term overbought reading from their RSI.
The combination of oversold indications and resistance from the 200-day signal that the shorts are likely to take control of Coca-Cola shares over the intermediate-term. Watch for the strongest prospect for support to come in when KO shares approach $41.50. A break below this price will target a move back below $40.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
