Stocks are starting to show some nervous signs as the last three days of activity suggest that sellers may be taking the reins. Yesterday’s mid-afternoon sell-off shot the CBOE Volatility Index, also known as the “Fear Gauge,” to its highest levels since August. The move was a response comments from Alan Greenspan that suggested that both the stock and bond markets are in bubbles.
We’re seeing carryover into today’s trading as the buyers are starting to back away and sellers are stepping up. Today’s Three Big Stock Charts takes a technical read from General Electric Company (NYSE:GE), Apple Inc. (NASDAQ:AAPL) and First Solar, Inc. (NASDAQ:FSLR), three stocks finding themselves in a must-win situation to avoid another 5%-10% decline over the next month.
General Electric Company (GE)
“The General” is sitting on another round number that traders are hoping will hold. The stock has been on a slide lower since their earnings and the announcement of a potential breakup of the company’s segments to get fuller value from their assets.
The stock has been in a bear market since April 2017, but the next move is likely to shave another six percent from GE’s value in short order.
- General Electric stock has been very sensitive to round-number prices as the stock has made its decline from $22 to its current $16. This psychological phenomenon is playing a hand in the support of GE stock right now, but a break below $16 will shoot shares towards $15.
- Trading volume on General Electric shares is waning. This indicates that the buyers helping to prop the stock above $16 are declining, a bearish indication.
- The latest consolidation has taken GE stock’s RSI out of oversold readings which indicates that there is once again downside potential for the stock.
- Watch for a near-term target of $15 for GE shares.
Apple Inc. (AAPL)
Now creeping-up on a 10% decline from its highs, Apple stock is facing growing selling pressure as investors see more doubt about the success of the newest iPhone. The company will announce its earnings results this afternoon, which is going to act as the catalyst for this move. Forget about the earnings announcement, watch this chart.
- Apple stock is one of the more reliable stocks for seeing a “sell the news” reaction to their earnings. This adds downside pressure to the near-term outlook for the stock.
- Apple shares are sitting on a key chart support price at $165. A break below this price is going to draw more technical sellers into the market immediately.
- A break of the chart support at $166 will see shares target $157.50, a price at which the market will likely defend heavily, based on the chart support seen in September 2017.
First Solar, Inc. (FSLR)
We’re seeing the analysts start to ask more questions about First Solar as the stock is forming a potential double top. A double top is one of the most reliable technical pattern meaning that the bulls should be on alert.
With earnings not slated until the middle of February, First Solar stock is in danger of seeing a swing trade put the stock “on sale” for those traders who want to jump in ahead of the earnings announcement. Which price should you be watching? Let’s look at the chart.
- After peaking in January, shares of First Solar have trailed the market in relative strength, a sign that the stock is falling out of favor with traders.
- The consolidation across $67 is now wearing thin on the chart support that has been provided by this price. Volume has declined dramatically recently, indicating that the stock is seeing less speculative buying and support of this price.
- A move below chart support at $67 will also mean a break below the 50-day moving average of First Solar’s stock. This trendline has been transitioning into a neutral pattern that will quickly turn bearish on a move to $63.
As of this writing, the Johnson Research Group did not hold a position in any of the aforementioned securities.