The market’s highs continue to draw investors into stocks; however, there are some names in the large cap technology-based Nasdaq 100 Index that are already showing signs of a pending breakdown. While names like Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc (GOOGL) and Netflix, Inc. (NASDAQ:NFLX) are trading at their highs, others are slipping into neutral-to-bearish trends that traders should avoid.
Today’s three big stock charts look at the technicals of Intel Corporation (NASDAQ:INTC), Paychex, Inc. (NASDAQ:PAYX) and Applied Materials, Inc. (NASDAQ:AMAT) as the black sheep of the Nasdaq 100, while they break into trends that should be warning those holding them to exit.
Intel Corporation (INTC)
Semiconductor stocks have been taking a leadership role in the rally over the last year, but Intel shares have been slow in keeping up with the sector’s breakneck speed higher. Now, shares of INTC are breaking into a neutral-to-bearish trend that acts as a warning sign for the stock’s intermediate-term future.
- INTC shares are sitting at a key chart support level today that traders and investors should be watching closely. $43 represented a strong support level with increased volume in December. A break below this price will shift Intel Holders into sellers.
- Intel is trading below its 50-day moving average ($45.17), which is currently in the process of rolling-over into a bearish signal.
- A break of $43 will target $40 over the next two to three months as selling pressure and volatility will see an increase. This round-number chart support should hold and serve as a buying opportunity for INTC traders, but the short-term outlook is bleak.
Paychex, Inc. (PAYX)
Despite the employment market growing stronger, shares of Paychex are now slipping into a short-term bearish trend that may extend itself into a full-blown bearish move over the next three months.
The technicals are tilting lower, which should serve as a warning for the traders to either exit or short PAYX shares.
- The strong fundamental picture for Paychex should be driving the stock higher; however, we’re seeing more selling pressure on the stock’s move lower, which suggests that the bears are taking control of the stock.
- PAYX shares are approaching the $67 level, which has been a key chart level for the stock. A break below this price will increase selling volume immediately and target a move lower to $65 in short order.
- Additional support at $67 may be compromised as the 50-day moving average for PAYX stock sits just below that price. With traders sensitive to shifts in trends, a break below the 50-day will add selling pressure to an already strong selling trend.
Applied Materials, Inc. (AMAT)
Applied Materials shares have been able to rally with the rest of its strong performing peers, but the recent activity is raising technical questions for AMAT stock.
A shift in a key trendline as well as trading ranges that suggest traders are now selling into strength are marks against Applied Material’s short- and intermediate-term outlook.
- Today’s price activity is seeing AMAT stock break back below its key 50-day moving average. This is happening after Applied Materials saw its shares carried higher by the strong market rally over the last two weeks. The break below this trendline will increase selling pressure.
- The same 50-day moving average has moved into a bearish trend as it is now moving lower. This increases the odds that AMAT stock will close lower each day to a 2:1 bearish ratio.
- Support for Applied Materials sits at $47.50; however, this would mean that the stock has broken the key $50 level. Traders interested in buying the shares on a pullback should eye $47.50.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.