NASDAQ Composite (.IXIC) Index tumbled 113.91 points (1.46 per cent) to 7,702.38, with chip companies that do business with Huawei among the hardest hit
Shares of technology companies fell sharply on Monday (May 20) in down session for Wall Street after Google began to severe ties with Chinese telecom giant Huawei amid the US-China trade war.
The tech-rich Nasdaq Composite Index tumbled 113.91 points (1.46 per cent) to 7,702.38, with chip companies that do business with Huawei among the hardest hit.
The Dow Jones Industrial Average declined 84.10 points (0.33 per cent) to 25,679.90, while the broad-based S&P 500 fell 19.30 points (0.67 per cent) to 2,840.23.
Google, which makes the Android system used on many smartphones, said it was complying with a US order last week that barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security, a move targeting Chinese giant Huawei.
Shares of Google parent Alphabet shed two per cent, while chip companies like Micron Technology, Skyworks Solutions and Qualcomm all fell.
The losses added to a dismal stretch for semiconductors, which have lagged the S&P 500 over the last two weeks as the US-China trade war has worsened.
The Huawei ban “led to selling in the Chinese giant’s suppliers and partners, since the likes of Intel, Alphabet, Broadcom, and Qualcomm would all register lower revenues should the ban remain in effect,” said a note from Gorilla Trades strategist Ken Berman.
Among other companies, Sprint jumped 18.8 per cent and T-Mobile 3.9 per cent following an announcement that the Federal Communications Commission endorsed a merger of the companies.
Shares of both companies pulled back somewhat from peak levels after Bloomberg reported that the Justice Department was likely to oppose the deal. But both companies still ended significantly higher.
Overall, the bias in prices is: Downwards.
The projected upper bound is: 7,936.52.
The projected lower bound is: 7,480.00.
The projected closing price is: 7,708.26.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 53.8970. This is not an overbought or oversold reading. The last signal was a sell 14 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 39.14. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 14 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -107.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 13 period(s) ago.
Rex Takasugi – TD Profile
NASDAQ COMPOSITE closed down -113.910 at 7,702.375. Volume was 2% below average (neutral) and Bollinger Bands were 24% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 7,835.50 7,875.08 7,533.16
Volatility: 27 19 26
Volume: 572,528,960 563,364,736 581,955,264
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
NASDAQ COMPOSITE gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
NASDAQ COMPOSITE is currently 2.2% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .IXIC at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .IXIC and have had this outlook for the last 7 periods.