Week 31 Big Tech Stocks Review
Although I prefer to trade ETFs for various reasons, I do track the Big Tech stocks also known as the “Magnificent 8” because of how they move markets.
Trending Heat Map
The AAPL and AMZN trending is heavily influenced by their earnings release on Thursday. It is still interesting to see that the 10day SMA of price actually went below the 20day SMA for AMZN even though other indicators improved significantly. So, I am not sure how much to lean on AMZN going up in the near term.
TSLA, NFLX and MSFT are trending short-term bearish. GOOGL and META look the strongest as of now. But all of them are weakening. We can see that also from the FNGS trending which is short-term bearish.
Performance
What jumps out at me are MSFT, NFLX and TSLA. Everyone has had a poor first 4 days of August (except of course AMZN due to their earnings pop). But these 3 had performances that were lackluster in July as well.
Week-by-Week Performance
MSFT is down 3 weeks in a row. That only means it has been weak. It does not mean it will go up next week or even go down next week. The trending is bearish so the right bet would be to bet to the downside. I am only pointing out that it is down 3 weeks in a row so that anyone shorting keeps that in perspective.
Week 32 Expected Moves
This is the closest I get to forecasting and even this is not my forecast. Note that it is also not very reliable. Last week, 10 out of the 19 I tracked overshot their expected move to the downside. Granted, last week was a major down week and I should not expect the similar results this week as well. But the point is that it starts with a 68% chance. So, we cannot assume the price is going to remain within this range. It is a very good thing to track in my opinion and for alert traders can be profitable.
Strategy
The markets are in transition and these markets are harder to trade for trend followers. It is harder for trend followers like me to do swing trading. The key is to trade where there is higher conviction. Also, smaller trade sizes.