Stocks continue their slide higher this week as the major indices are inching higher in early morning trading. Large-cap technology names like Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT) and Alibaba Group Holding Ltd (NYSE:BABA) continue to press higher, but what about the smaller end of the technology curve?
Typically, markets are driven higher by speculation, which tends to lift smaller technology companies as investors are willing to take a chance on more volatile names. Today’s three big stock charts show us an example of one technology shooting star and two that are falling back to earth, quickly. Below we look at the charts for AMZN, Fitbit Inc (NYSE:FIT) and GoPro Inc (NASDAQ:GPRO).
Amazon.com, Inc. (AMZN)
Amazon continues to amaze investors as the fundamental picture for the company seems endless. Last quarter’s earnings report was proof that Amazon’s current trajectory is reasonably reliable, resulting recent price upgrades. The stock has entered another volatility rally that appears ready to drive shares even higher.
- AMZN shares are trading back above the technically significant $1,120-level this morning, which brings them closer to breaching another volatility rally. A close above this level will bring even more volatility buyers into the mix, driving prices higher.
- The Chande Trend Meter for Amazon is moving into bullish territory again. This should add another round of buying to the stock.
- Price upgrades on AMZN shares are rolling-in again. In addition, the stock is seeing some upgrade potential as only 83% of the analysts tracking it have it ranked a buy. This will give a further push to the stock.
Fitbit Inc (FIT)
Fitbit shares continue to struggle as the technology gadget just can’t find a way to differentiate itself from growing competition.
Short-term traders are bidding FIT stock higher after hitting some technical support, but that’s likely to be short-lived based on the technicals.
- Another earnings disappointment, Fitbit shares pulled back immediately to support at their 200-day trendline. This key trendline kicked-in for some support last week, but the FIT price trend is turning, suggesting that a short-term bounce may turn back to selling.
- Overhead at $6.35, Fitbit’s 50-day moving average is in place to add resistance. In addition, the trendline is transitioning into a bearish outlook as it rolls over.
- Current targets for our technical models forecast a move to $5.20 for FIT stock.
GoPro Inc (GPRO)
Another smaller tech company that can’t get off the ropes is GoPro. The stock had been mounting a technical rally ahead of earnings only to fall 8% after the poor report sent traders into the market as sellers.
Now, GPRO shares face a technical support level that needs to hold to avoid another round of selling.
- GoPro shares have been set-up for a volatility rally as the stock broke above its top Bollinger Band ahead of earnings. This was quickly reversed by traders on the weaker-than-expected report by GPRO. That technical breakdown is now grabbing momentum lower.
- After breaking back below its 50-day moving average, GoPro’s critical trendline is now starting to move lower. This suggest that the stock is headed for another period of intermediate-term selling pressure.
- The break of the 200-day moving average is now adding even more pressure to GPRO shares. At the same time, the stock is breaking through the round-numbered $9-level, which will add selling pressure. Initial targets are for GoPro shares to trade another 10% lower to $8.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.