When asked to name Michael Jackson’s best album, most choose the undeniably fantastic Thriller (1982) which had seven hit songs and has sold more than 70 million albums worldwide! I tend to lean, however, to his prior release which was called Off the Wall (1979). Only 20 million albums have been sold worldwide and, by my count, it has eight hit songs. Too, and this is pure luck on my part, Quincy Jones, who produced both records, has called Off the Wall Jackson’s magnum opus.
I thought about Off the Wall while looking agog at the chart and performance over all manner of time frames for NVIDIA. I know you know the following, but for posterity’s sake here are some numbers worth reviewing: NVDA’s market-cap makes it 5% of the S&P, 8% of NASDAQ and 38% of the SOX. At its intra-day high on Friday, it was 96% above its 200-Day MA, as of Friday’s intra-day high it was up 323% on a year/ year basis, and it’s up almost 300% on a 2-year basis, 602% on a 3-year basis, and 1602% on a 4-year basis. To say NVDIA’s been “Workin’ Day and Night” is an under-statement and to say it is overbought is a more egregious understatement such that nobody should be shocked if NVDA’s intra-day reversal on Friday is the first salvo in a corrective phase. To tie this all together this is likely a good time to be reminded of Bob Farrell’s classic admonition that, “Exponentially rapidly rising or falling markets /stocks usually go further than you think, but they do not correct by going sideways.” At least that’s the way things used to work.
NVIDIA – Daily w/ 50- and 200-Day Moving Average with MACD and RSI. Measuring NVDA’s advance from its Oct 31, 2023, low – Friday’s intra-day high and extrapolating potential support levels on a pullback offers Fibonacci retracements (24% and 38%) of 835 and 750.
As noted above, I’m still looking for Apple (i.e., The Scarlet Letter, Jan 10, 2024, and The Scarlet Letter Part 2, Feb 26, 2024) to work lower.
Apple – Monthly w/ 12-Month MA, MACD, Rel. to S&P and Relative Momentum – AAPL now below its 12-Month MA, its Monthly MACD has crested and rolled from a lower high and Relative Price (3rd panel) and Relative Momentum (4th panel) are already bearish.
Tesla’s not in the S&P Info Tech / XLK, but it is a member of the Big 7 so I included it.
Alphabet – Weekly w/ 40-Week MA, MACD, Rel. to S&P and Relative Momentum – GOOGL looks to be where AAPL was a few short weeks ago as it hugs its upward-sloping 40-Week MA. I think it works lower owing to the same factors that applied to AAPL: deteriorating absolute momentum and bearish relative price action and bearish relative price momentum. 120 looks to be the first support level for GOOGL and then 100 thereafter. Is the bottom of the range @ 80?
What follows is the overall Technical Scoring for the S&P Information Technology Sector (XLK). While the overall Scores are still stellar with 83% Good / Strong and only 6% Weak, the Scores are presented to focus on the Change vs. Last Week column because 20% of the stocks had Scores move lower in the last week. It’s safe to say the group is no longer monolithic.
In addition to expecting lower levels for AAPL, GOOGL, and TSLA, VeriSign (VRSN) is and has been bearish and investors should be ready for Oracle (ORCL) and Adobe (ADBE) to move down, too. Also, it seems right to say that Palo Alto Networks (PANW) is on its way to retesting its upward-sloping 200-Day MA with key support @ 250. PANW closed @ 280 on Friday. ON Semi (ON) is a better sale on my work with risk to Oct low; it closed just under 79 Friday. Intuit (INTU) looks like it can follow Adobe and that’s not a compliment. And, lastly, Cognizant (CTSH) has big resistance @ 80.
VeriSign – Weekly w/ 40-Week MA, MACD and RSI – Technical Score = 0; Risk to 160 / Bottom of Range
Oracle – Monthly w/ 12-Month MA and MACD – Technical Score = 1; it’s not evident here because this is a monthly chart but check the daily version and you’ll see that ORCL has had two especially prominent downside gaps since Sept ’23. Coupled with its Weak Technical Score and cresting Monthly MACD (lower panel) says it’s probably a pretty good idea not to be too complacent here.
Adobe – Weekly w/ 40-Week MA and MACD – Technical Score = 1; ADBE is already beneath its downward-sloping 40-Week MA and Weekly Momentum via the MACD in the lower panel is going away at a rapid rate. 500 is key support but I don’t think it will hold. 400 sounds like hyperbole as a support level below 500, but that’s what the chart suggests.
ON Semi – Daily w/ 50 and 200-Day MAs and MACD – Technical Score = 2; Hakeem Olajuwon was active in December 2023 and again in March 2024 as the stock was turned away twice from its cresting 200-Day Moving Average. Risk to low 60s / Oct ’23 low.
