Selected Tech Stocks Trapped at Resistance

Apr 24, 2008: 9:49 AM CST

I wanted to highlight a few key technology stocks that are bumping up against overhead resistance, whether via the 200 day moving average or prior price levels.

Let’s start with everyone’s favorite: Apple, Inc ( AAPL ):

AAPL is actually trapped between two levels of prior support/resistance, and should have massive support about the $145 area, which is derived from prior resistance and the 20 and 50 weekly exponential moving averages.

Resistance comes in the form of prior support (which may not be all that difficult for traders to clear).

Notice also the non-confirmation by volume on the most recent price swing higher, which has taken us to further resistance (not shown) via the 61.2% Fibonacci retracement level just beneath $170 per share.

Adam Hewison of MarketClub recently analyzed both Apple and Amazon prior to their earnings announcements.

Ebay (EBAY):

Ebay is having trouble overcoming its 200 day moving average, which also is a level beneath the most recent price consolidation (value) zone of December 2007.

The large impulse move up off a double bottom, along with potential support from the upcoming 50 period moving average, could bolster this stock.

Microsoft (MSFT):

Unlike some other stocks in its group, Microsoft broke convincingly above its 200 day moving average and out of a two-month consolidation (value) zone. Also, it appears Microsoft has built a sufficient base from which to rally.

Amazon (AMZN) is having trouble, but appears to be in good shape:

The stock could be breaking a potential ‘ascending triangle’ but it needs to break that pesky 200 day moving average to go convincingly higher. Notice the two recent high volume days on the up (buy) days which are typically positive for stocks.

Key support is likely to come in – should we trade lower – at the $75 per share level, via a rising trendline and the convergence of two moving averages.

This stock could be poised for a large move up.

Finally, Super-Stock Google (GOOG) is having trouble it its 200 day moving average:

Not even an $80 day is safe from the resistance of the 200 day moving average! Seriously, Google is having a little trouble at this area, but recall that any large impulse move (such as a gap) typically has a counter-reaction against it as traders digest new levels and consolidate gains. We love to buy on retracements, remember, and few are comfortable at such higher prices so look for a retracement of the original overnight gap impulse.

Also, be sure to keep an eye on these and other stocks that are forming similar patterns, because there will be leading stocks and lagging stocks that can provide you opportunities for profit.

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