These 5 Stocks Will Make Or Break Nasdaq 100 – Price Volume Analysis on AAPL, MSFT, AMZN, TSLA, NVDA
There is little damage in Nasdaq 100 (NDX) index despite the number of stocks above 200-Day Average is only at 58% as of 16 Dec 2021, as shown below:
This is not a healthy sign you would like to see for the stock market breadth in a bull market. There was a divergence between Nasdaq 100 and the market breadth as shown in the green and red arrow above in 2018 and 2020. As NDX made a higher high, the market breadth headed to lower high suggested that there were lesser stocks participated in the uptrend. A market selloff came subsequently.
Now, there is a divergence between Nasdaq 100 and the market breadth again, which is similar to 2018’s based on the chart above. Nasdaq 100 is at a vulnerable position, which could be easily hit by a market correction should these 5 giant stocks – Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Tesla (TSLA), Nvidia (NVDA) drop further. It is important to analyze these stocks with price volume analysis as the weightage of these 5 stocks account for 40% of Nasdaq 100. So, they could easily make or break Nasdaq 100. Refer to the YouTube video to find out how to apply price volume analysis for detailed market update.
Price Volume Analysis on AAPL
As shown in the chart above, Apple (AAPL) broke out on 17 Nov 2021 from the immediate downtrend resistance line and the localized range with increasing volume. Despite having a reaction at the up-sloping range, the magnitude was shallow and subsequently AAPL went into a climatic run with overbought condition and peaked at 180.
A change of character bar with spike of supply showed up on 13 Dec, which was the largest bearish bar since the breakout from Nov, stopping the uptrend for now. A short-term bearish scenario is expected in AAPL. A break below 170 could trigger more selling ahead and to test the support zone near 160.
Price Volume Analysis on MSFT
Microsoft (MSFT) peaked on 22 Nov with a change of character bar followed by a pullback to 320. So far it is consolidating within an apex formation. For a bullish scenario with supply absorption, MSFT is expected to have contraction of volatility together with decreasing volume. Yet, the volatility and the volume are still high in general, which could be an indication of a bearish bias. A break below 320 could test lower support near 300 followed by 280.
Price Volume Analysis on AMZN
Amazon (AMZN) has been consolidating within a trading range between 2870-3770 since Sep 2020 after a change of character. Supply has been decreasing within the trading range, which is an encouraging sign for an accumulation bias.
The recent pullback in Nov accompanied by slight increasing of supply and so far, is not yet threatening. Should further weakness triggered by the broad market, AMZN could test support at 3200 followed by 2870. Directional bias is neutral for AMZN since it is still within a trading range.
Price Volume Analysis on TSLA
Tesla (TSLA) had a parabolic run after broke out the resistance on 21 Oct. A change of character bar with spike of supply has shown up on 9 Nov, which stopped the uptrend and turned TSLA into a trading range between 1000 – 1200.
Recently, TSLA broke below the psychological support at 1000 with increasing supply hence formed a sign of weakness followed by inability to rally up, suggested more weakness ahead to test the support area 800-900.
Price Volume Analysis on NVDA
Nvidia (NVDA) had a climatic run up with a buying climax formed on 4 Nov with spike of stopping volume. The uptrend was stopped and a trading range was formed between 320-280. The up thrust (false breakout) from 22 Nov -1 Dec came with increasing of supply suggested selling into strength.
The recent pullback broke below the support at 280 followed by a rally after FOMC announcement on 15 Dec, which hit only ½ of the trading range and a reversal bar showed up yesterday with increasing of supply suggested more weakness ahead. A break below the swing low at 272.5 could trigger more selling to test lower support area 200-220.
Bearish bias is formed in 4 out of 5 of these heavyweight stocks while AMZN is the only one with neutral stance based on the price volume analysis. Should they drop further as per the analysis above, Nasdaq 100 (NDX) is likely to experience market weakness ahead test 14500-15000 support area. I will be discussing more on the tactics to deal with the current market condition in my weekly live webinar on Sunday. Click here to visit TradePrecise.com to get more market insights straight to your inbox for free.