Technology stocks took off with the rest of the market on Monday as the Tax Reform rumors gave investors reason to shovel more cash into the market. The one-day bump has put the sellers into the driving seat again as end-of-year tax selling and profit-taking are likely to drive prices over the next week.
VeriFone Systems Inc (NYSE:PAY), Apple Inc. (NASDAQ:AAPL) and Advanced Micro Devices, Inc. (NASDAQ:AMD) are among the technology companies that are reversing their bullish ways today. While each of these stocks have been able to muster short-term rallies that have teased traders into thinking that these stocks are ready to run.
Instead though, these three tech names are now reversing course, just as the lighter holiday trading volume will allow them drift lower. Let’s look at the charts to determine if you should be a buyer or seller of these names.
VeriFone Systems Inc (PAY)
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The most popular tech stock on the Street is slowing its growth as the year-end approaches. AAPL stock often sees a “buy the rumor” rally ahead of its earnings release, now scheduled for more than a month away.
Given this, it would be “normal” to see Apple shares trade in a range.
The top of the current range for AAPL stock is represented by the $175-price-level. This price has held shares at bay three times since the beginning of November and is currently pressuring prices. The bottom of the stock’s range is captured by $167 as this price has served as a bottom for Apple stock in two instances since November. The last bounce from $167 was what we refer to as a “double bounce,” which is a strong bullish technical pattern that suggests that AAPL stock is not likely to move below this support over the short-term. The Chande Trend Meter remains bullish on Apple shares. This tells us that the trading range environment has not taken away from the positive momentum and that the next breakout is likely to be a bullish move ahead of earnings in January. Advanced Micro Devices, Inc. (AMD)