Tesla Inc (NASDAQ:TSLA) stock could be in for more near-term downside.
Shares of Elon Musk led Tesla Inc (NASDAQ:TSLA) have been on a continuous downtrend since the beginning of last week, losing nearly 12% of their value. A few days ago, we had pointed out that a pullback in Tesla stock was around the corner. Well, that pullback seems to have gotten bigger in TSLA stock. The stock has closed only once in the green since last week and if the Tesla stock technical chart is something to go by, the stock could be headed lower in the near term.
The Tesla stock technical chart flashed a bearish Moving Average Convergence Divergence (MACD) crossover in the last trading session. The MACD indicator is one of the most popular momentum indicators used by chartists. The MACD line fell below the center line in a bearish move, indicating that the stock might well be headed lower. Besides this, TSLA stock had recently breached the 100-day simple moving average (SMA) in a bearish move, which had acted as a strong support level for the stock throughout 2017. Now, Tesla shares trade below all its key moving averages, be it the 20-day, 50-day or the 100-day SMA. With the stock not anywhere near oversold territory, as per the popular momentum indicators, Relative Strength Index (RSI) and Bollinger Bands, Tesla shares are likely to be under pressure. The recent bearish commentary surrounding Tesla stock also has fueled the downtrend with Bernstein analyst Toni Sacconaghi warning investors that the share price could fall further from here. All in all, Tesla stock might be under further pressure.
Twitter Inc (NYSE:TWTR) stock could be headed lower.
Our second trade of the day focuses on Jack Dorsey founded Twitter Inc (NYSE:TWTR). Shares of the microblogging platform had gotten off to a good start this month (September), rallying hard in the first two weeks but have struggled since the rally came to an abrupt end as the news of Twitter being in the middle of the Russian probe by US lawmakers surfaced. The Russian probe episode is likely to keep the stock under pressure in near-term. We also had warned investors earlier to book some profits stating that the rally in Twitter stock was unsustainable. Based on the signals from the TWTR technical chart, the share price could decline further from here.
Just as in the case of Tesla stock, the Twitter stock technical chart also flashed a bearish MACD crossover, implying that the stock could be headed lower in the near term. TWTR stock is already down nearly 8% since mid-September. Now, with the MACD line falling below the center line in a bearish move, the chances of a downtrend to continue are more. The bearish signal from the MACD is also echoed by the stock's moving averages. TWTR stock is presently trading below all its moving averages and also faces a strong resistance from its long-term 200-day SMA.
Gilead Sciences, Inc. (NASDAQ:GILD) stock could soon resume its uptrend.
Shares of pharma major Gilead Sciences (NASDAQ:GILD) have had an amazing bull run since the company announced the acquisition of Kite Pharma for $11.9 billion in cash. Gilead stock was up more than 18% in the span of a few trading sessions following the announcement. In our past coverage, we had suggested that GILD stock was due for a pullback after its bull run and the stock has had a decent correction since then. Gilead stock declined another 3.52% yesterday after the biotech company announced that COO Kevin Young would retire early next year. Investors don't seem to have taken kindly to the top executive's early retirement and seem to be worried about the motive of the departure. However, analysts have suggested not to read too much into the announcement. Alethia Young and Eliana Merle of Credit Suisse, in a recent note to clients, have suggested that Kevin Young's tenure was not considered permanent anyway as this is his second tenure and had come out of retirement for certain specific goals. Analysts largely echoed the thought that GILD stock's future depends more on the success of its Kite Pharma acquisition while RBC's Brian Abrahams sounded optimistic about Gilead's future prospects and stated: "Gilead has big plans for Kite Pharma". And, well, if the Gilead stock technical chart is to be believed, the stock could soon resume its uptrend. Ask me, Why?
The recent correction has taken Gilead stock into oversold territory. The Relative Strength Indicator (RSI) and Bollinger Bands indicators, which are popular momentum indicators used to identify overbought/oversold conditions in the markets, both signal an oversold condition. The present RSI measure has fallen to 26, which is below the commonly used oversold threshold of 30. In addition to that, the share price has breached the lower Bollinger Band to flash an oversold signal too. Generally, the combination of these two signals is considered as a strong signal. In other words, there is a high chance of rebound in Gilead stock price.
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