Yesterday, the market flat-lined, despite reaching into the green several times throughout the day. In early morning trading, the S&P 500 is making a comeback from yesterday’s fall. However, despite all of this, Cypress Semiconductor Corporation (NASDAQ:CY), Advanced Micro Devices, Inc.(NASDAQ:AMD) and Cisco Systems, Inc. (NASDAQ:CSCO) are on the top of the list of big stock charts this morning as each of these tech stocks are showing signs of technical wear.
Cypress Semiconductor Corporation (CY)
Cypress Semiconductor shares are in the midst of a technical battle that is likely to result in the next 5-10% directional move. For the last three months, CY stock has consolidated in a wide range that is resulting in a few things to watch.
- The shares have been bound by their top Bollinger Band on the last three attempts to break higher. This is indicative of the fact that Cypress Semiconductor stock is being heavily traded by technical traders.
- A trend of lower highs and lower lows is forming over the last three months. The last high had CY stock topping-out at $14.50. Shares just hit $14.55 and are looking ready to reverse.
- Finally, the 50-day moving average for Cypress Semiconductor shares is in the process of potentially transitioning into a neutral to bearish trend. This will add even more selling pressure to the shares.
In all, the chart indicates a reversal from this point will likely target a price of $14.50 as the next bottom for CY stock.
Advanced Micro Devices, Inc. (AMD)
Advanced Micro Devices traded higher yesterday as news of use of the company’s products in new Apple Inc. (NASDAQ:AAPL) products hit the wires. AMD stock surged about 8%, right into a technical test.
- Advanced Micro Devices was rejected on an intraday basis right at its 50-day moving average. This level is currently at $12.21.
- Last week, the 50-day moving average crossed below AMD’s 100-day trendline, marking an intermediate-term bearish signal for the stock.
- The move almost took shares into an overbought reading according to their RSI which is approaching 70.
A rejection at $12.25 will mark another in a string of lower highs and lower lows and give traders reason to sell AMD in order to lock-in short-term profits. If this happens, expect the stock to revisit $10.
Cisco Systems, Inc. (CSCO)
Certainly, a troubled technical story, Cisco Systems continues to struggle with its chart and resistance levels as the market is losing faith that this networking giant can turn things around.
- We continue to see CSCO stock lag the market after its disappointing earnings report last month.
- Despite hitting a technical oversold signal from its RSI, Cisco shares have had no power to rally from their recent trough. For comparison, the last similar oversold signal resulted in a 6% rally over a two-week period.
- CSCO shares are fighting to hold their head above the 200-day moving average. A move below this trendline, which is beginning to roll over, would also mark the stock’s move into a long-term bear market trend as it would then be below the 20-month trendline.
Bottom line is that the market appears to have moved away from this large-cap technology name and it will take considerable improvements in the fundamental and technical picture to turn things around.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
