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Don't Make a Big GAAF

The charts are starting to deteriorate on Google, Apple, Amazon and Facebook.
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Growing up in a major city, one learns to always be aware of one's surroundings. It becomes a habit to keep an eye on anyone who is nearby, approaching, or especially behind you. The idea is never to be taken by surprise.

Why bring this up now? When watching this market, I get the same feeling that used to come over me when approaching a precarious situation on a city street.

The technicals on many major stocks are deteriorating. This is most obvious with Apple (AAPL), which is now in a downtrend in both intermediate- and short-term timeframes after forming a lower high (LH). Apple has fallen back below its 50-day moving average (blue, in the chart, below), and was already trading beneath its 200-day moving average (red). The 50-day MA offered no support when the stock violated it on Friday.

Last week, the stock received a Moving Average Convergence Divergence (MACD) sell signal (red circle). Apple has horizontal support at $107.30 (dotted horizontal line), and might be a buy for a trade at that price. I'm not advocating selling the stock, and I maintain my long position, but the short-term outlook is not encouraging. 

Apple can't be ignored, because it's a huge component of the major indices, and at times it has acted as a market leader.

Another stock that tends to lead is Facebook (FB), which also presents an unsettling picture.

Facebook has broken a steep trendline that has been intact since the market bottomed on August 24. This stock also received an MACD sell signal, last week (red circle). Facebook is considerably stronger than Apple, since it remains above its key moving averages, and it has been a general in recent weeks. Where the generals lead, the soldiers tend to follow.

Unlike Facebook, Alphabet (GOOGL) remains above its major bullish trendline. Unfortunately, last week the stock received the same MACD sell signal as Facebook and Apple (red circle).

Finally, Amazon (AMZN) has been the strongest of this group. The stock remains above its key moving averages and its bullish trendline, but today it finally received its MACD sell signal (red circle). 

In summary, Apple, Facebook, Google, and Amazon all appear vulnerable. Other big name stocks -- like Netflix (NFLX) and Tesla Motors (TSLA) -- have already experienced pronounced weakness.

Add it all up, and it's not time to buy. It's time to trim longs, add to shorts, and shift the portfolio to neutral. This bull market is now over 6½ years old. It is time to protect profits. Don't let this market take you by surprise.

Source for charts: TradeStation

At the time of publication, Ponsi was long AAPL, although positions may change at any time.