Technology bulls were pushed back on Tuesday as vague rumors about trouble at a big tech firm set a bearish tone. The Nasdaq 100 index slipped to 12,964, a loss of 0.70%, states Jon Markman, editor of Strategic Advantage.
Microsoft (MSFT) became the third big tech company this week to be targeted by bears. Shares tumbled 2.3% on Tuesday after CNBC reported that several institutional sources are worried sales are slowing at its cloud computing division.
Negative chatter is common ahead of the earnings reporting season. Apple (AAPL) and Tesla (TSLA) were lower Monday following negative chatter. The weakness of Microsoft is unsurprising. Despite the loss on Tuesday, the stock is up 17.9% in 2023 on enthusiasm for a batch of new artificial intelligence products around ChatGPT.
Bears are pushing back on the impressive price gain with rumors. It might be a tough sell. Big narratives ultimately drive stock prices, and AI is a game-changer. Professional investors may look past any near-term earnings shortfall as they position for a more important, secular windfall.
The benchmark Nasdaq 100 has important support at 12,791, the rising 20-day moving average. Resistance is 13,750, the August 2022 high. I expect that bears will begin to concede that advance through the summer months.
The NDX Loop: Members bought the ProShares Ultra QQQ (QLD) at on March 21 at $45.81, and on April 10 at $47.97. The average price is $46.89. The 2x leveraged index fund closed Tuesday at $47.93, up 2.2% from entry.
Set up to sell half of the position at $54.10 lmt gtc, and half at $58.20 lmt gtc….Also, place a stop loss order at $47.20 good after 11:00 ET only.
