XAutoplay: On | OffAs the Nasdaq is nearing a test of its 50-day moving average, several big-name tech stocks are finding themselves in similar positions.
Amazon.com (AMZN), fueled by its Whole Foods Market (WFM) buyout announcement, rebounded higher after testing support at the 50-day line, which marked the second pullback for the stock since its mid-March cup-with-handle breakout. Friday’s 2.4% gain puts Amazon in a follow-on buy area.
Amazon rose 1.3% to 1,000.58 in early trading on the stock market today. Amazon is now about 5% above its 50-day line. Investors buying off 50-day rebounds should try to do so as early as possible.
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Google parent Alphabet (GOOGL) and Facebook (FB) have both found support at their 50-day lines too. Facebook pierced that line in intraday trade on Monday and Thursday of last week, while Alphabet was able to hold above that level.
Alphabet and Facebook both rose more than 1% in Monday morning action.
When deciding if you should buy on a pullback to the 50-day, look for declining volume as the stock falls and rising volume as the stock bounces from the line.
Apple‘s (AAPL) chart is in a worse condition than its big-cap tech peers. The stock has sliced below its 50-day line and has now triggered a sell signal: Apple has nearly made a round trip from its follow-on entry at 141.12.
For those who bought Apple at the 118.12 handle entry back in January, the stock is now up about 20% from that level, after gaining as much as 34% from the buy point.
Apple climbed 1.6% in early trading Monday, but is still well below its 50-day line.
Apple chip supplier Broadcom (AVGO) is nearing a test of support at the 50-day line (or the 10-week line on a weekly chart). After breaking out of a flat base with a 227.85 buy point in early May and running up as much as 13% from that level, shares were back within the 5% buy range as of Friday’s close.
However, Broadcom popped 2.3% early Monday, pushing the stock back beyond the 5% chase zone.