Top tech stocks testing their 50-day/10-week lines are Amazon.com (AMZN), Nvidia (NVDA), Adobe Systems (ADBE), Workday (WDAY) and ServiceNow (NOW). Amazon stock dropped below its 50-day moving average for the first time since April, on September 24. Nvidia stock, Adobe stock, Workday stock, and ServiceNow stock, in addition to 50-day tests, finished the session on Friday just above or below certain technical points.
The 50-day moving average is an important technical level. It’s an area where mutual funds and other big institutions will step in to buy shares, supporting a stock. In some cases, that can offer additional buying opportunities.
ServiceNow stock has a best-possible 99 Composite Rating right now.
Amazon stock has a 98 Composite Rating.
Nvidia and Adobe stocks boast 96 CRs.
Workday comes in with a good-not-stellar 90.
The Composite Rating focuses on certain fundamental and technical measurements like earnings growth, return on equity and general price performance. Top stocks typically have high Composite Ratings when they launch big runs.
Market Change From Tech Stocks?
The stock market could be in the middle of a sector rotation. The Dow Jones charged ahead 2.2% last week while the Nasdaq composite inched lower. Industrial, airline, financial and energy stocks fared well, joining health care among top sectors. Other tech stocks seem to be dipping. Software, which includes Adobe, Workday and ServiceNow, has been among the biggest losers in recent sessions. Nvidia has been a standout, but the chip sector has been struggling all year. Amazon.com is near a high, but it’s had a long run and the other FANG stocks are struggling to reel.
Amazon Stock
Amazon.com ended Friday just above its 50-day line, which it hadn’t touched since late April. But it’s the third time in the last five months that Amazon stock has tested its 10-week line. Shares have been drifting lower since hitting a record high on Sept. 3, but are only about 6% off their highs.
Amazon stock has moved higher for a while so it wouldn’t be a surprise to see it pull back for a period of weeks or months. Other big internet leaders like Netflix (NFLX), Google-parent Alphabet (GOOGL) and especially Facebook (FB) have been trading sideways.
Nvidia Stock
The graphics card maker has been one of the few semiconductor stocks to perform well in 2018 while even the broader chip sector has lagged. Nvidia stock moved out past a 269.30 flat-base buy point in late August, rising as high as 285.22 on Sept. 4. But since then shares have pulled back. Last week, Nvidia stock fell 4.7% to 263.45, testing its 50-day line.
One potential concern: Nvida’s relative strength line, which tracks a stock’s performance vs. the S&P 500 index, has been moving sideways for nearly two consecutive quarters. That follows a long uptrend for Nvidia stock and its RS line.
Adobe Stock
Adobe stock moved past a flat-base buy point of 263.93 in late August and then again in early September, peaking at 277.61 on Sept. 14. Shares dropped by 5% last week to 260.88, back below the buy zone on Friday. Adobe stock is now just above its 50-day line. It’s an area where shares have found support several times over the past year, including earlier this month.
Workday Stock
Shares of the human resources and financial software creator dropped 8.2% to 138.63 last week, falling below its 50-day moving average on Friday. Workday stock closed the session just above a 137.53 cup-and-handle point, but it could be in danger of erasing a 14% gains
ServiceNow Stock
ServiceNow stock plunged 9.1% in the four sessions ending last week, falling below a 194.91 and through its 50-day moving average. Shares dropped 6.2%, not quite enough to trigger a 7%-8% sell signal, but concerning.
ServiceNow stock jumped on Thursday-Friday to 189.69, just above the 50-day moving average. Shares have made some choppy, stair-stepping moves over the last several months, with breakouts struggling to hold their trends. But ServiceNow has generally moved along with a gradually rising 50-day moving average line.
