If you've been a dip buyer of late, I'd say today is the day to take profits. If not today, then early tomorrow. Fades have come hard at the end of the day when they do come. Yesterday, we didn't have one, so it was a nice change, but a lot of the tech momentum names I've followed are either up hard for the third straight day or getting really extended.
- BigCommerce Holdings (BIGC) , yesterday's technical mention, has already tacked on another 6% today. Once it got above resistance, buyers swept this one hard to the upside. We're already close enough to the initial upside target that traders need to take some off the table if they bought the breakout.
- Cloudflare (NET) , an October 4th mention, has done nothing but go from $115 to $165 without a single down day. This move has blown me away, but if you're buying the tenth straight up day after a 45% move, you are certainly opening yourself up to some pullback risk.
- HubSpot (HUBS) , a trade from this week, has gone from $694 to $808. I under anticipated this move, but it made for an easy, early exit.
Big tech has been a great place to be but chasing now feels like asking to get punched in the face. Now is when you either take profits or acknowledge the run happened without you, so the next best play is to watch for a pullback. That doesn't mean you simply buy on a pullback but have a plan. Do you prefer Fibonacci retracement levels or a touch of a moving average or a retest of a previous breakout level? Focus on that.
And I'm not saying short or be bearish. In terms of selling, I'm not advocating to sell everything but rather adopting a take some profits and consider a trailing stop or add back price.
We're getting ready to head into earnings season. While the financials seldom rile the markets with their earnings, next week will get far more interesting as Tesla (TSLA) , Netflix (NFLX) , Intel (INTC) , Snap (SNAP) , and ASML (ASML) are big names reporting. These are all $100 billion to $200 billion market cap names with the exception of Tesla sitting close to $800 billion. While it is still not the week for earnings on the tech side, it does have the potential to influence action. Keep that in mind before we get happy hour deep into the weekend tomorrow after the close.
