A for effort

03/05/19

  • Apple and Amazon rallied yesterday despite a downturn in the broader market
  • Both stocks have struggled to gain ground over the past several weeks despite tech strength

There’s no reason to veer off into acronym country, but among the stocks that sidestepped yesterday’s downturn in the US market were Apple (AAPL) and Amazon (AMZN).

They’re two distinct companies that have long been linked to a few other unrelated companies in a group that begins with F and ends with G. But let’s not get into that.

Apple (AAPL), 12/19/18–3/4/19. Apple (AAPL) price chart. Intraday breakout

Source: Power E*TRADE


What has connected AAPL and AMZN lately is the nature of their recent price movement—in a word, sideways. The above chart of AAPL shows the stock is still within the bounds of the range that began in early February, despite popping above the top of it on an intraday basis yesterday.

The following chart of AMZN tells a similar story, except that the range has been a little choppier and lasted a little longer:

Amazon (AMZN), 12/19/18–3/4/19. Amazon (AMZN) price chart. Top of the range.

Power E*TRADE


Curiously both of these consolidations—in two of the most heavily traded US stocks—were occurring as the Nasdaq 100 (NDX) was put together an increasingly strong rally (let’s call it a nearly 9% gain between January 23 and March 1).

But yesterday, when the major US indexes suffered their biggest intraday declines in nearly a month (the NDX fell the least, though), both AMZN and AAPL bucked that move to post gains on the day and push at the upper boundaries of their consolidations.

When stocks trade contrary both to their recent history (i.e., going sideways) as well the direction of the broad market (yesterday’s decline), it can potentially signal renewed trader interest in names that have fallen out of favor for a while.

Amazon and Apple have yet to make definitive moves out of their ranges, and the broad market is still wavering around resistance, but somebody was interested in buying them yesterday.

Finally, in full disclosure, another of those stocks from The-Group-That-Shall-Not-Be-Named, had a pretty good Monday, too: Facebook (FB), which also has traded sideways for a while (after releasing earnings in late January), rallied more than 2% yesterday.

Market Mover Update: After jumping 13% on Friday, CRSPR Therapeutics (CRSP) followed up yesterday by rallying to its highest level since October 2.

Today’s numbers: PMI Services Index (9:45 a.m.), New Home Sales (10 a.m.), ISM Non-Manufacturing Index (10 a.m.).

Today’s earnings include Ciena (CIEN), Kohl's (KSS), Target (TGT), Weibo (WB), Fate Therapeutics (FATE), Ross Stores (ROST), Urban Outfitters (URBN).

 

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