We’ve seen the technology sector provide leadership for the rest of the market of late as many of the “new tech” names have gained strength, but how about the more established names?
This morning’s three big stock charts takes a look at three of the old school “Four Horsemen of Technology”, Microsoft Corporation (NASDAQ:MSFT), Cisco Systems, Inc. (NASDAQ:CSCO) and Intel Corporation (NASDAQ:INTC). In this case, two of the three are giving us bullish signals, while the third is flashing warnings signs.
Intel Corporation (INTC)
Shares of Intel have taken another technical beating over the last week, while the rest of the semiconductor sector remains relatively strong. Short-term traders may be looking at an opportunity to grab shares as they are likely to see some strength, but limited upside.
- On Thursday and Friday, INTC shares dipped well into technically oversold readings as the RSI is now below 30. The last time this happened was February, ahead of a short-term bounce in the shares that took them from $34.75 to $36.50.
- The oversold readings may pop shares higher, but the recent volatility selloff broke Intel shares’ lower Bollinger Band, suggesting that we are likely to see even more selling volume hit the market.
- Overhead, the 50-day and 200-day are preparing for a “Death Cross” as the 50-day will break below the longer 200-day within the next few weeks. This will attract even more technical sellers targeting a break below $34 and a target of $30.
Cisco Systems (CSCO)
Cisco is starting to grab a tailwind as the technical picture is improving. CSCO shares have spent more than a month consolidating while creeping higher.
Now, the stock is breaking higher, giving bulls an opportunity to grab a potential bullish play.
- Cisco stock has been riding the 200-day moving average and has been building support on this trendline. The support strengthened at $31.50 and is now rising.
- Last week, a surge in activity moved CSCO stock above $32, which has been serving as technical chart resistance. This move is now starting to attract buying volume for the first time since January.
- Cisco shares are also on the brink of a potential Volatility Rally as the stock is sitting right on its top Bollinger Band. A push above this will increase the buying volume and result in a fast and aggressive move towards a target of $33.50.
Microsoft Corporation (MSFT)
Not many traders or investors have been talking about the strength that Microsoft shares have been displaying. For the year, MSFT stock is trading 12% higher and 44% higher over the last 12 months. There’s a lot of upside according to the current chart of Microsoft.
- After spending a number of weeks trading near the support lent to shares by their 50-day moving average, we’re beginning to see MSFT stock take a relative strength leadership role in the market.
- Microsoft is now braking above $71.25, which has given resistance over the last two weeks. The move above this chart resistance will increase buying volume and help provide short-term rally potential to the stock.
- Momentum for MSFT stock is beginning to build, as indicated by the stock’s MACD. This tells us that the developing rally is likely to carry shares back towards their recent highs at $73, which could also trigger another volatility rally as the possibility that the stock breaks its top Bollinger Band is high. This would result in a short-term target price of $76.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
