• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

15 Tech Stocks Vulnerable to a Pullback (Part 1)

Keep these names and levels on your radar.
By BRUCE KAMICH
Jun 09, 2017 | 12:31 PM EDT
Stocks quotes in this article: ATVI, LRCX, EA, SWKS, AMAT

Technology stocks have delivered the bulk of the gains that investors have chased. Friday morning we laid out a potentially bearish case for the U.S. stock market noting that the lion's share of the performance is coming from a narrow list of names.

If these names break their uptrends or the 20-day moving average line closes below the 50-day moving average line we would have a good technical reason to consider trimming long positions.

In this daily bar chart of Activision Blizzard (ATVI) , above, we can see prices are above the rising 20-day and the rising 50-day moving averages. The 20-day might be too far above the 50-day line but it has not yet begun to narrow. The pace of volume looks to be heavier in May than April but overall I would not say that volume has expanded from the December low.

The daily On-Balance-Volume (OBV) line is still in a strong upward trend from November but the 12-day momentum study has weakened in May and June so far. A close below $56 would start to weaken the picture.

In this daily bar chart of Lam Research (LRCX) , above, we can see that prices are above the rising 20-day moving average line and above the rising 50-day moving average line. Volume looks like it is slowing from mid-April levels but the OBV line continues to rise.

The bottom panel shows a bearish divergence as momentum has slowed from May to June even though prices have moved to new highs. A close below $145 would start to weaken this chart.

In this daily chart of Electronic Arts (EA) , above, we can see a large upside price gap with heavy volume, with a retest of the top of the gap. EA is above the rising 20-day moving average line as well as the rising 50-day moving average line. Volume has slowed from the day of the price gap but the daily OBV line continues to rise, suggesting that buyers remain very aggressive.

Momentum is showing a small double top in May while prices make higher highs. This difference in movement is a bearish divergence but it hasn't negatively impacted prices. A close below $95 would be a bearish signal.

In this daily bar chart of Skyworks Solutions (SWKS) , above, we can see that prices have tested the rising 20-day moving average line and the rising 50-day moving average line. Dips below the 20-day have been short-lived and there have been no breaks of the 50-day average line. The volume of trading shows no clear trend but the OBV line is clearly rising.

Price momentum is interesting in that there was a very strong move in January with the price gap but since then momentum has been flat versus the new price highs. This divergence has gone on for more than three months but it doesn't seem to impact prices. A close below $100 is likely to trap some longs.

Applied Materials (AMAT) in this daily bar chart, above, shows a prolonged rise. Prices are above the rising 20-day and the rising 50-day moving averages. The daily On-Balance-Volume line has risen with the price action but we still have a bearish divergence since early May as momentum has weakened as prices have made new highs.

A decline below $42 should worry the bulls.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | U.S. Equity | Technology | Stocks

More from Technology

2021 and 2022 Look Difficult for Intel, While 2023 -- Might -- Be Better

Eric Jhonsa
Jan 22, 2021 1:44 PM EST

Competition from AMD and ARM CPU developers looks set to take a toll over the next two years. But Intel could be in better shape in 2023 if its new CEO is ready to make some tough choices.

Intel Disappoints and Its Stock Suffers

Bruce Kamich
Jan 22, 2021 11:45 AM EST

When the chipmaker turns lower you need to get out the way.

Taser Maker Axon Enterprise Is Poised for New Highs

Bruce Kamich
Jan 22, 2021 8:10 AM EST

AAXN has rallied about $50 this month.

Palantir Technologies Looks Toppy and Further Declines Are Possible

Bruce Kamich
Jan 21, 2021 11:06 AM EST

Stand aside from the long side.

Tech Gives Push to Market's Rotation

James "Rev Shark" DePorre
Jan 20, 2021 4:49 PM EST

Money moved back into big-cap technology names, thanks to strong positive reactions to earnings from Netflix.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    I discuss price targets in my Saturday column.
  • 07:54 AM EST GARY BERMAN

    Friday Morning Fibocall for 1/22/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 11:16 AM EST CHRIS VERSACE

    Worst Stocks to Buy for the Biden Presidency

    Biden's take on the minimum wage, likely moves on ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login