The political backdrop and poor seasonality of August trading continues to pressure stocks to the point where investor sentiment has turned from optimistic to cautious. This change in sentiment has affected the technical picture as we’re seeing more component companies in the S&P 500 Index break below key technical support.
Today’s three big stock charts look at the technicals for Qualcomm, Inc. (NASDAQ:QCOM), Bank of America Corp (NYSE:BAC) and GoPro Inc (NASDAQ:GPRO) for opportunities to profit by taking advantage of short-term reactions to some very technically sensitive levels.
Qualcomm, Inc. (QCOM)
Semiconductor stocks continue to see pressure as investors are reacting to the changing political landscape by taking risk off of the table. Qualcomm has been among one of the relative strength laggards for much of the year, and the charts don’t look as though they’re going to change anytime soon.
- QCOM shares have seen a rally from an oversold signal of the stock’s RSI and chart support at $52. The strength and volume behind this rally has ebbed, leaving the stock to wander lower towards support.
- The recent high initiates another trend of lower highs and lower lows for Qualcomm shares. This pattern is a negative for QCOM stock looking forward and it will worsen if the $52 level fails to hold on the next step lower.
- From a long-term perspective, Qualcomm stock is trading in a bear market trend as shares are below their 20-month trendline. In addition, the monthly chart shows the critical need for $52 to hold as price support. A break of this support will target $47.50 as the next level of support for QCOM.
Bank of America Corp (BAC)
Investors, both long- and short-term got excited about the prospects of the financials leading the market higher in 2017. Higher interest rates and regulatory overhauls were at the core of these hopes. Now, with these changes all but off the table, the financial stocks are lingering back into potentially dangerous ground.
This includes giants like Bank of America, who’s shares are sending warning signs to traders.
- BAC shares are testing their 50-day moving average today. This comes after the stock sold-off after an attempt to cross above substantial chart resistance at $25. A break of two days below the 50-day will turn the traders against Bank of America shares, adding selling pressure.
- Momentum on BAC stock is edging into negative territory as indicated by the MACD trend. This is occurring on better-than-average volume, indicating that traders are migrating away from the stock.
- From a long-term perspective, the consolidation that has happened for almost all of 2017 has traders nervous about a shifting trend in the banking stocks and Bank of America. Currently, our technical models target a short-term move to $23 where the stock must hold to avoid a longer-term period of selling.
GoPro Inc (GPRO)
After a surprisingly positive earnings report, shares of GoPro are now coming well off of their highs. There are some technical signs that the stock could (and we mean could) get some support, but there are a lot of long-term holders that have been looking to sell into any strength.
Let’s look at GPRO’s chart to see where the next move take the stock.
- GoPro shares surged immediately after the latest earnings report, sending the stock into a technically overbought condition. This has triggered traders to sell into the recent strength.
- The single-day move after earnings shifted GPRO stock’s 50-day moving average into an intermediate-term bullish trend, which may help attract intermediate-term buyers if/when the stock sees support kick-in.
- Traders looking for an opportunity to benefit from another bounce higher should maintain an eye on $9.25 as this is clear chart support and resistance for GoPro shares. A break below this line in the sand will target a move to $8.50.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
