As the oversold bounce in US equities ensued in the second half of last week, it was the big tech as represented by the Nasdaq 100, or the Powershares ETF (QQQ) leading the joy. Yesterday, Monday August 27th the QQQs again looked to be leading the way as they briefly re-tested their mid-August and year to date highs. As equities however topped during the second half of the day, tech gave up all of its gains, leaving a notably bearish doji candle with a long upper shadow behind on the daily chart of the QQQs.
To get a better idea of yesterday’s bearish turnaround in the QQQs however we need to look at its three largest holdings: Apple Inc (AAPL), Microsoft Corporation (MSFT) and Google Inc (GOOG). Combined, these three stocks make up nearly 30% of the QQQs, thus looking at their charts will give us a better idea of what the index itself has in store.
In short, yesterday’s news parade including Syria, Larry Summers, and the debt limit wasn’t kind to either three stocks.
Apple Inc (AAPL), which still finds itself consolidating the move back up to the $500 area, yesterday also gave up most of its gains after price was rejected near the recent highs. Follow-through selling in the stock over coming days is thus much more likely now.
Microsoft Corporation (MSFT), after its big surge last Friday August 23rd, yesterday gapped down at the open and closed near the lower end of Friday’s trading range. Any further weakness in this stock and it slips into the large up-gap from Friday (blue box on chart).
And then there is Google Inc (GOOG), which through these eyes in the near-term looks the heaviest of all three as it is hanging on to a confluence of support with all its might. With yesterday’s weakness the stock is now again right back at its summer 2012 up-trend, its 100 day simple moving average, and with any follow-through selling will likely push below last week’s low.