The markets continue to exhibit a select group of bullish sectors, which command the majority of capital flows. Technology in particular, has seen an abrupt change of course, in the past three sessions.
Nasdaq100 at Resistance
Overbought and oversold oscillators have turned bullish. RSI, MACD and stochastic have all turned from oversold conditions suggesting potential upside, if the bulls can seize the initiative. The only resistance at this point is the 9, 20 and 50 period moving averages. Once price get above VBP, overhead supply tapers off dramatically.
That said, TICK cumulative is losing momentum; that needs to charge higher. If it does, this will confirm institutions are buying more stocks on the uptick, compared to those they are selling on the downtick,
The Technology Sector
The S&P500 Technology Sector mirrors the oversold conditions of the NDX100, with a bit more resistance at VBP (horizontal histogram on the left.)
If price moves above this zone, we should see more capital flows. Stochastic and MACD suggest this might happen.
FANG and Tech
The FANG stocks could use a boost as well, so we are focused on these names in addition to those on the watch list.
Facebook, Amazon, Netflix and Google all look similar to MOMO (chart below). Targets for the later are just overhead at 42.27.
Semiconductors and Seasonality
If the above wasnt enough, we also saw the semiconductors moving together. NVDA and AMAT bolted higher. These stocks are showing signs that they might continue as well. Remember, the month of July is a strong seasonal period for technology.
We’ll be looking to scalp a few strong stocks today and add to winners.
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