The Nasdaq 100 is under performing the S&P 500 and the Dow Jones Industrials, both of which just hit new highs. This is a much different look on the price charts than that of the first six months of this year. Up until lately, the big cap tech and social media names had done better than almost anything.
One of reasons for the underperformance is apparent when you consider the price chart patterns of the four A’s of the index: Alphabet, Amazon, Apple and Advance Micro Devices. Not one of these major companies are hitting the higher highs of some of those further along in the alphabet.
The Nasdaq 100’s 4 A’s:
Take a look at the daily price chart of Alphabet (formerly known as Google):
This major Nasdaq 100 component, with a market capitalization of $2013 billion, does not have the strength now to make it back up to the early July peak just above the $190 level. About half of the gains from early March to the present have been given back.
Alphabet trades below the 50-day moving average (the blue line) and has been below it since mid-June. That early September dip below the 200-day moving average (the red line) must have been disconcerting for the Wall Street money managers invested in the company. The stock has bounced since then, but still.
Here’s the daily price chart for Amazon:
Another one of the Nasdaq 100’s major names is failing to make a new high at a time when two of the big cap indexes are hitting new highs. The stock peaked in early July at $200 and gapped down with ferocity at the beginning of August. The low was near the $152.50 level, a one-month drop of 23%.
Amazon, with a market cap of $2010 billion, has bounced back, filled the gap and moved higher. Now with eight closes above the down trending 50-day moving average, it’s up to the $191 area. The early August sell-off took the stock to below the 200-day moving average which continues to trend higher.
The Apple daily price chart is here:
The price last week rallied to above the August high but remains below the early July peak. Friday’s selling volume bar (underneath the price chart) is the biggest of the year. There are now two closes above the 50-day moving average so maybe it will stop the down trending.
The 200-day moving average is trending upward and has been since late May. Note that, unlike the above two Nasdaq 100 components has managed to stay above that longer-term moving average. Overcoming that $235 level is the next challenge for Apple, market cap $3469 billion.
The daily price chart for Advanced Micro Devices looks like this:
This one has the weakest price chart look among those mentioned here: you can see that the 50-day moving average crossed below the 200-day moving average in mid-August. The peak came in early March up there at $225 and the stock now is priced at $155.95, a 30% slide.
The semiconductor company, with a market capitalization of $252 billion, is not keeping up with the S&P 500 nor with the Dow Jones Industrial average. Wall Street is not as excited about tech equities as autumn arrives and money once reserved for this sector appears to be going elsewhere.
No artificial intelligence was used in the writing of this piece.
More analysis and commentary at johnnavin.substack.com.