Stock Trends

Risks at the top of the index, stocks making 52-week highs and more earnings reactions

Good morning,

A big theme last year was “the risk at the top of the index” where it was the very largest stocks dragging the S&P 500 and Nasdaq 100 lower than many of the smaller components.

That got flipped on its head at the beginning of the year, but we’re starting to see some signs that it is back. Outside of the official tech sector, things are mostly fine, but the 3 largest stocks within tech, Apple, Microsoft, and Nvidia are all stalling out and showing weakness lately.

Today, we’ll check in on their charts as well as:

• Stocks making 52-week highs this week

• Earnings movers

• Disney

• Weak food stocks

• and more!

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Tactical risks in the biggest tech names

AAPL breaks key support

Apple was declining into earnings, fell on Friday after earnings, and followed through with more downside early this week, taking out its November 2021 highs. Microsoft has already done this (see below) so it could be a significant headwind to the indexes and the tech sector if Apple gets stuck here. The stock is trying to stabilize at $177, but a break could signal another 5% of downside to the rising 200-DMA and diagonal support.

Microsoft already lost the breakout

Microsoft also printed a nice hammer on Tuesday and near oversold conditions this should start to become buyable. The stock remains on the Blue Chip Hot List with $312 as a stop.

Nvidia breaking the 50-DMA

NVDA broke below its 50-DMA yesterday, falling more than 4% for the second time this month. The stock was already showing some technical weakness with two lower highs since mid-July and RSI-14 momentum negatively diverging. The risk is that Nvidia retests its breakout point (which would be a 20%+ plus decline) or worse, fills the gap from its historic earnings report, which would be a nearly 35% decline.

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52-week highs that look strong