5 Stocks That Indicate The Stock Market Is Ready To Fall
Michael Kramer | Jul 15, 2021 12:58AM ET
As I was writing today’s blog, I thought I had a deja-vu for a moment. It turns out it wasn’t deja-vu because it actually happened. The day was Jan. 29, 2018. The story; 4 Stocks That Are Signaling The Stock Market Is Ready To Fall. In that story, I noted how the RSIs of Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL) all had very overbought RSIs. Apple (NASDAQ:AAPL) was in the mix for other reasons. Of course, things got really ugly after that through Feb. 8.
The same thing is emerging today, with the biggest stocks all reaching very overbought reading. On the surface, stocks did a bunch of nothing today, rising by around 10 bps. It really wasn’t a great day, and if not for Apple, the index probably would have been down. The S&P 500® Equal Weight ETF (NYSE:RSP) was actually down about 15 bps today, so that’s evidence enough.
But remember what I wrote above.
h2 NASDAQ 100/h2The NASDAQ 100 (QQQ) managed to finish the day with an RSI of 75.5, a pretty high reading, well not pretty high, very high. I will mention this again, in case you have not seen it from me enough. When the QQQ RSI gets this high, the outcomes are not good most of the time, including January 2018.
Apple (NASDAQ:AAPL) is no different, with an RSI, back over 80. This is not a sustainable level.
Microsoft is no different, with an RSI currently at 76.1, coupled with the completion of its 5 waves up.
As it is for Alphabet with RSI of 73 and rising wedge pattern.
Get The News You Want
As is Amazon, with its now lower reading of 70 on the RSI.
NVIDIA (NASDAQ:NVDA) may be leading the charge, as it was one of the first stocks to break higher. Now it is one of the first stocks to break down. The stock’s RSI, after hitting 83, has now broken an uptrend which started on May 19 with an RSI that is clearly trending lower. Could the shares fall back to $650 very easily, based on technical and fundamentals.
Finally, who can forget the ARK Innovation ETF (NYSE:ARKK). Its RSI reached 76 while failing miserably at resistance around $131.
Anyway, I will leave you with that. I will be back as soon as I can.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.