While Wall Street wasn’t deterred by Friday’s terrorist attacks in Paris, evidence suggests that the selling pressure will soon resume on concerns of a possible Federal Reserve interest rate hike next month.
Consequently, market breadth remains weak, with fewer stocks participating to the upside. What’s more, commodity prices continue to slide while the U.S. dollar strengthens and weighs on corporate earnings growth. High-yield junk bonds remain very weak on evidence of turbulence in the credit market.
And a number of popular technology stocks look vulnerable to further downside pressure.
These are the five to watch out for.
Tech Stocks Under Threat: Apple Inc. (AAPL)
Apple (AAPL) shares have fallen back below their 50-day moving average to test critical uptrend support of its four-month rebound.
A breakdown here would put the August lows back in play. The tepid response to the iPad Pro and the iPhone 6s is weighing on sentiment, and UBS analysts recently lowered their price target after channel checks suggest iPhone assembly orders have been cut 10% over last year.
Tech Stocks Under Threat: Intel Corporation (INTC)
Intel (INTC) has seen shares fall to test its 50-day moving average once again — following a test in late September — as its stochastic indicator tips into a downtrend signal for the first time since last August.
Investors are looking ahead to an analyst day on Thursday.
Specifically, analysts at FBC are looking for an explanation of the breakdown of Moore’s Law and why the launch of 10nm process chips has been delayed and what the roadmap to a 7nm process looks like.
Tech Stocks Under Threat: Qualcomm, Inc. (QCOM)
Qualcomm (QCOM) shares were hit hard earlier this month after the firm ended its forward guidance figures, in favor of quarter-by-quarter breakdowns.
These, however, were below consensus estimates, dropping to its lowest levels since November 2011.
Further, investors remained concerned about the saturation in the smartphone market and the rise of competitors, while analysts at Nomura recently downgraded shares.
Tech Stocks Under Threat: Yahoo! Inc. (YHOO)
Yahoo! (YHOO) shares have fallen to test support at their 50-day moving average. Shares have been moving lower in recent weeks after investors were disappointed with a large guidance miss in late October, as well as slower growth metrics in its search business.
Analysts at Axiom Capital told clients that after three-and-a-half years, CEO Marissa Mayer continues to face difficulty in her turnaround plans amid underwhelming results, decelerating growth and a batch of unknowns surrounding its new search relationship with Google.
Tech Stocks Under Threat: Cisco Systems, Inc. (CSCO)
Shares of Cisco (CSCO) have fallen through their 50-day moving average for the first time since August after issuing disappointing guidance.
The cause? The drag from the negative impact the stronger dollar has on the value of foreign earnings when they are repatriated.
In a note to clients, analysts at FBR also highlighted the company’s warnings on uneven IT spending in areas outside the United States.
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.
