The Big Guns At 50

The big names had some swings last week. Many of these names have been riding the 20-day moving average. On a daily chart, lots of them touched the 50-day this week. The charts below are all weekly, so I’ll use the 10 week moving average which is roughly equal to the 50 day moving average. Microsoft has been a little lower slope, reaching back to the 10-week moving average (WMA) for the lows before bouncing since the rally began. This week, Microsoft checked back below the 10-week moving average but closed back above. The stock has been on a steady advance for five years, but has a 12% range this week. The long 40-week moving average (WMA) is way down at $180, but both moving averages have nice smooth uptrends.

Netflix has been a COVID name as everyone was at home binge watching. Netflix has maintained following the 10 WMA but it wasn’t as reliable a low as on MSFT, as it moved slightly below each time. This week, the stock tried to move to fresh highs, but so far has some tweezer top price bars. Tweezer tops are very tall price bars back to back, one up, one down with a quick reversal wiping out the gain. Netflix had a $70 range this week which is ~15%.

Amazon (AMZN) has been a wild ride this week. The stock has doubled off the COVID lows, but this was a particularly big week, regardless of where you bought in. With a $440 swing, that rattles the morning cup of coffee. This is the first time the stock touched the 10 WMA since April.

The rest of the big names, Apple, Tesla, Alphabet and Facebook are still above the 50-day moving average and did not touch it this week. Tesla has a wide ranging week of 25%, but only closed down 5% from the previous week. That is some huge swings to sit through. Big moves both ways, but the stock has been very strong.

Tech had a big swinging week. The rest of the market was not as violent. After such a big run, this week will have more anxiety than the previous couple of months. We’ll need to see tech hold up at these levels after such a wide swing. For longer term investors, it is just an exhale after a fabulous run. For swing traders, it’s pretty important to be on the right side of those swings.

Watching that 50-day or 10 week moving average will be a good reference point for support. Lets see if it holds.