Sunday, September 2, 2018

Comparative Analysis: NASDAQ TECH Stocks on AMZN & AMD

NASDAQ record high at 8133 levels would have to be watched carefully for profit taking activities that can be considered to be a probable 'Melt Up' when considerable volumes based on their respect average from the major stock components would be accompanied by the end of the week's trading. 

In relation with AMD's price action, the relative cluster formation may well turn out to be an 'island price reversal' but not necessarily a trend reversal as of late. However, this could indicate an initial corrective phase in the making with a certain degree of price exhaustion on the daily trading sessions that exist when the market is in the state of euphoria. 

As the market has been in an extended bull run for quite some time now. Check out how tech chart on AMD week's price performed with high market volumes reflected on the last trading of the month of August.

On valuation, AMD currently has a Forward P/E ratio of 53.95. Its industry average Forward P/E of 18.3, thus AMD is trading at a premium comparatively. Over the past month shares have gained above 30% which has outperformed the computer & tech sector of almost 3.5% while compare with the SP500 gain close to 3% in one point last month. 

While on the flip side of AMD shares, Short interest positioned is at nearly 25%. It hasn’t been as high since mid-2015, but this can well serve as another fuel for a rally whenever short squeeze in the market takes place. Well worth noting is similar to what transpired with AMZN - Amazon equivalent to a USD10B worth of short interest while still closed above $2000.00 as of Aug 31, 2018 and bound for a correction. 
Last week also was the end of the month's trading where most position adjustments occur in a volatile fashion coupled by technical price gaps reflective on the charts. Especially on Aug 27, where the market price fizzled out from its registered high at 8133 corresponding to AMD's high at 27.30 and Nasdaq closed at 8088 on Aug 30th and moved higher at the close of Aug 31 at 8109 while AMD at 25.17 respectively. 

Forward looking at these levels would weigh in the first two weeks of September price action. And carefully watch market behavior. We shall be waiting for the fresh data on outstanding positions and on settlements as well. For now, pay close attention to the major indices which would provide us a better glimpse of what the true color would be over and above the trade war & agreements issues in the newswire.


  1. Analysts calling on AMD over Intel have led to market sentiments pushing momentum levels above the previous high and is now at the 28.00 record. This again have been a heavy drag for short interest trades now in pain. Let's see how all turns out for the remainder for the week as majority of US equity indices are now in a corrective phase.

  2. Post Labor day, with more participants back, now comes another increase in volatility where the NASDAQ declines to 7,982.91 down by -108.34 (-1.34%) from its high at 8133 levels.

    Although, markets would be waiting for important data on Friday that would price action to where we had previously called similar to a 'Melt Up' which has now been realized. Its inverse equity #ProShares Short QQQ (PSQ) is up by 29.80+0.43 +1.47% based on our previous call.

  3. Price Update: As of Sept 6, 2018

    #US Dollar at 95.183 up by +0.079 +0.08%
    #S&P 500 at 2,873.32 down by -15.28 (-0.53%)
    #Dow 30 at 25,920.99 down by -54.00 (-0.21%)
    #Nasdaq at 7,919.12 down by -76.05 (-0.95%)
    #Invesco QQQ at 181.55 down by -1.90(-1.04%)
    #ProShares Short QQQ (PSQ)30.05+0.29 (+0.97%)

  4. The US market focus is on the #JOBs numbers, we'll have to see how #NASDAQ holds-out. So far, the anticipated price action from the high at 8133 have indeed stalled its momentum from profit-taking activity due to surrounding market pressure.

    Daily vs. Weekly Chart formation & Comparison