Microsoft, ServiceNow, Nvidia, Netflix, Cloudflare and Shopify are testing their 10-week lines.
The 50-day or 10-week moving average is a natural place for leading stocks to find support, especially in a market pullback. A rebound from these levels can often offer opportunities to buy shares or add to an existing position.
None of these stocks have tested their 50-day lines but all are trying to find support at their 10-week averages.
All but Cloudflare are S&P 500 components.
Nvidia stock, Shopify, ServiceNow and Microsoft are on IBD Leaderboard. MSFT stock is on IBD Long-Term Leaders. Nvidia, ServiceNow and NET stock are on the IBD 50. NOW stock is on the IBD Big Cap 20.
Tech Stocks Trying To Hold Support
Microsoft stock edged down 0.1% to 370.60, just below its 10-week line but still close to its 21-day line. Shares have traded very tightly for the past several weeks. MSFT stock has a new flat base, part of a base-on-base pattern. The official buy point is 384.30, according to MarketSmith analysis. A move above 377 would clear key resistance, offering an early entry. On the downside, a decisive move below the 10-week line would be a sell signal.
ServiceNow stock fell 1.8% to 675.30, now clearly below the 21-day line and undercutting the Dec. 15 low. Shares are testing the 10-week line for the first time since breaking out of a flat base in early November. A strong move above the 700 level could offer an aggressive entry. NOW stock has a four-weeks-tight pattern with a 720.68 buy point. That could turn into a flat base by the end of next week.
NFLX stock rose 0.4% to 470.26, extending a modest move off the 10-week line. Shares are still below the 21-day line, after tumbling 3.8% on Tuesday. Netflix stock still has a 482.70 handle buy point on a consolidation going back to July.
Nvidia stock fell 1.2% to 475.69 on Wednesday, closing slightly below its 10-week line after slipping below its 21-day on Tuesday. NVDA stock is still within a shallow flat base with a 505.48 buy point. A move above the 500 level would offer an early entry.
NET stock sank 3.7% to 76.39, its fifth straight decline, including Tuesday's 4.7% tumble. Shares are just above their 10-week line. Cloudflare stock briefly undercut the 76.07 cup-base buy point, round-tripping a 14% gain. Investors who bought that breakout should have taken at least partial profits. But the 10-week line and old buy point are a natural base to find support.
SHOP stock sank 2.7% to 71.82 following Tuesday's 5.2% tumble. Shares are just above their 10-week line. Shopify stock hasn't given up more than half its gains from a mid-November breakout. The 50-day line is now roughly even with the 67.60 double-bottom buy point.
Support Today, But Tomorrow?
Keep in mind that just because a stock finds support on a given day doesn't mean it will continue to hold. DraftKings held support at the 10-week line at the tail end of 2023. But shares have plunged decisively to start 2024.
A lot will depend on the overall market. Of course, megacaps like Microsoft and Nvidia will have a significant impact on the market direction.
Please follow Ed Carson on Threads at @edcarson1971, X/Twitter at @IBD_ECarson and Bluesky at @edcarson.bsky.social for stock market updates and more.
