The broader market is working itself between a rock and a hard place as the S&P 500’s trading range begins to tighten. This, and a drop in volume in the market, suggest that a tradable move is in the works for stocks as a group. The number of companies that are trading below their respective 50-day moving average is on the rise, indicating that the market’s bias is turning.
Today’s three big stock charts looks at the technicals of Cisco Systems, Inc. (NASDAQ:CSCO), Intuitive Surgical, Inc. (NASDAQ:ISRG) and Microsoft Corporation (NASDAQ:MSFT) as three stocks that are threatening to slip into intermediate-term bearish outlooks as they battle to stay above their respective 50-day trendlines.
Cisco Systems, Inc. (CSCO)
![Cisco Systems, Inc. (CSCO)](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
The networking giant will report their quarterly earnings results in a little more than a week. For months, Cisco stock has wandered aimlessly in a broad range and is now in a technical battle that will determine the next 5-10% move in the shares.
- The last three days, CSCO shares have bounced between their 50- and 200-day moving averages. These critical trendlines are acting as support and resistance respectively. The first of these trendlines to break will trigger technical traders to take action.
- Currently, the 50-day moving average is trading below the 200-day, which is bearish for the stock’s outlook, adding potential pressure to the need for Cisco shares to rally.
- Adding to the bearish outlook, CSCO’s 100-day moving average is overhead at $32.45. If the shares are able to break above the 200-day they will immediately run into this additional hurdle. In all, there aren’t any trends that are Cisco’s friend right now.
Intuitive Surgical, Inc. (ISRG)
![Intuitive Surgical, Inc. (ISRG)](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Healthcare and related stocks are starting to lag again after playing some catch-up. Intuitive Surgical shares have gone from a volatility leader to a wandering laggard.
This indicates that the technical traders may have moved away from the stock, leaving it to form a longer-term top.
- The last week has seen ISRG shares track along their 50-day moving average as if it were a rail. A break below this trendline will bring technical sellers into the market as this stock is still 45% higher for the year.
- Volume on Intuitive Surgical has dried-up, indicating that the traders are taking a wait-and-see approach instead of actively supporting the stock.
- ISRG is continuing to correct from a short-term technically overbought condition that arose in late July as well as an intermediate-term oversold condition that still exists. This means that the stock has some time to go before it becomes a technical “value” for the market.
Microsoft Corporation (MSFT)
![Microsoft Corporation (MSFT)](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
We nailed the fact that Microsoft shares were overbought as they headed into their earnings announcement weeks ago. Instead of seeing the buyers come in to buy the dip, we’ve seen a continuation of the selling.
Now, we’re seeing technical reason that the selling is likely to continue.
- MSFT shares are teetering on chart support at $72. This level has acted as support and resistance in the past, meaning that chart watchers will move to sell on a break below this round number.
- Microsoft stock’s 50-day moving average currently sits at $71.33, meaning that a break below $72 will not only encroach chart support, but also trendline support that is key for the stock to maintain.
- According to the MACD indicator, MSFT stock is slipping further into a negative momentum situation. This will cause the stock to gravitate to the downside over the short- and long-term. Currently, our model targets a price of $68 if the shares break below $72.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.