The Nasdaq 100 Index is still fraught with technical concerns as the index is trying to break back above critical technical resistance/support afforded by its 50-day moving average. Trading volume on the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) has dropped significantly over the last few trading sessions suggesting that traders have some doubt.
Apple Inc. (AAPL)
Apple stock continues to fight with $145 as the stock has been unable to break above this consolidation level and there are signs that momentum on the heaviest weighted Nasdaq 100 are turning negative.
- Since early June, AAPL shares have been unable to escape a five point trading range between $142 and $147. We’ve seen the tightening of this range result in some lower lows and lower highs, which is signaling that the break may be to the downside.
- Overhead, Apple stock’s 50-day moving average is now transitioning into an intermediate-term bearish mode as it rolls over into a declining pattern.
- AAPL shares have been trying to hold on to support at the 100-day moving average. Failure for this trendline to hold Apple shares will likely target $130.
Applied Materials, Inc. (AMAT)
The semiconductor sector has become one of the more fractured sectors as focus within the sector turns to companies like Applied Materials and NVDA.
This has caused a seismic shift from the larger companies like Intel Corporation (NASDAQ:INTC) into the nimbler innovators.
- Coming off an oversold reading last week, shares of AMAT are now trading above their 50-day moving average. This trendline is ascending, which suggests that Applied Materials will remain in an intermediate-term bullish trend.
- Support for AMAT stock has successfully held at the 100-day moving average. This suggests that the stock’s technical traders are taking advantage of “buy the dip” opportunities.
- We expect to see a consolidation at $45 for Applied Materials shares, followed by a break higher to $50.
Nvidia Corporation (NVDA)
Nvidia’s 45% year-to-date returns and almost 200% 12 month return makes it the stand-out in the semiconductor sector. The company’s innovation into self-driving autos has now given an additional fundamental facet. Traders are still trying to get into the stock on pullbacks, helping to drive incredible performance.
- NVDA shares recently bounced from support at their 50-day moving average, which is in a bullish trend. This is suggesting that the stock is still supported by the “buy the dip” crowd.
- Nvidia hares are heading towards a break above $160, which would notch a new high and attract the attention of even more investors that have been chasing the name higher.
- Despite the incredible returns, NVDA shares are still only recommended as a buy by 54% of the analysts tracing the stock. Expect to see more upgrades that will help drive prices even higher.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.