The market is clearly taking its lead from the buzz surrounding the tax reform vote as futures spent the overnight session on a dizzying roller coaster ride. This morning’s trade is less exciting with the major indices trading mixed; however, there are still a number of popular stocks that are moving into potentially dangerous short-term trends.
Today’s three big stock charts look at the recent activity of General Electric Company (NYSE:GE), Nvidia Corporation (NASDAQ:NVDA) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL). The charts of two of these companies are suggesting lower prices on the way, while one continues to show strength.
General Electric Company (GE)
Could it be that General Electric is setting-up for another decline? GE stock suffered a huge decline after its most recent earnings announcement along with revelations of “ghost jets.”
But now, after a short rest, the stock appears to be ready to run lower again.
- After trading for weeks in oversold territory, General Electric shares embarked on a short-term rally that took it 6% higher. Now, shares are unwinding from the “dead cat bounce” and falling back into their intermediate-term bearish trend.
- GE shares are now testing critical round-numbered support at $18 again. A break back below this price will draw even more selling pressure on General Electric stock, likely forcing it to break through the recent bottom just below $17.50.
- Trend indicators such as the MACD and Chande Trend Meter remain in bearish mode, signaling that buying power for GE stock is lacking the necessary strength to break GE’s current short- and intermediate-term trends.
Nvidia Corporation (NVDA)
This white-hot stock is finally seeing some selling pressure as we head into the last month of trading for 2017. Traders are likely to take their cue from any change in the technical trend, which Nvidia shares are threatening to do now.
- After hitting new highs just under $220, NVDA shares are seeing selling pressure from profit-taking. The sector has been hit, but Nvidia is seeing deeper selling based on its past relative strength.
- The recent weakness has NVDA stock trading at its 50-day moving average, a technical test that will determine whether the next move it a 5-10% correction or rally.
- Momentum indicators are shifting into neutral mode, signaling that we should expect to see NVDA stock trade in a range at-best.
- Key chart support is in place at $195, as indicated by the green line in the chart above. A break below this price will also represent a move below the 50-day, which would accelerate selling in Nvidia.
Alphabet Inc (GOOGL)
Another technology name that has been running into selling pressure is Alphabet. GOOGL shares topped at $1,080, but have seen significant selling pressure over the last week.
Now, the stock faces a technical battle to remain in the bull’s good graces looking forward into the end-of-year trade.
- Serious chart support at $1,030 is now in-play. This price acted as support in November after the company’s earnings popped prices higher and then again in mid-November when GOOGL saw a “sell the news” selloff.
- The Chande Trend Meter for Alphabet shares is now moving from bullish to neutral territory. This suggests that GOOGL stock has lost momentum and is at risk of falling into an intermediate-term selling trend.
- With the 50-day moving average trending higher and sitting in position just above $1,000 (a significant round-number for support), GOOGL stock is more likely to see a significant amount of buying pressure come in to buy the dip at this price.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
