These two market leading stocks have corrected more sharply than the overall market from their September highs and MoneyShow’s Tom Aspray takes a critical look to see if either is now ready to turn around.
The passing of Greece’s austerity bill fulfills the main conditions for them to receive their next payment but the Eurozone finance ministers do not yet seem convinced. Clearing this hurdle may help stem the selling in the stock market. The futures are up slightly in early Monday trading. With banks and the bond market closed on Monday trading is likely to be light.
With less than two weeks before Black Friday many are trying to balance their fear of the fiscal cliff with the surprisingly upbeat attitude of the consumer as we enter the holiday buying season. The consumer sentiment has continued to improve since August and November’s mid-month reading was a new five year high.
The latest data on retail sales is out Wednesday and after three months of solid gains a slight decline is forecast by most economists. More importantly investors are trying to assess how the holiday season buying will impact Apple, Inc. (AAPL) and Amazon.com, Inc. (AMZN) as both have dropped sharply from their September highs.
Apple, Inc. (AAPL) is down 22.4% from its September high, while Amazon.com, Inc. (AMZN) has lost 14.3%. This is much worse that the 6.6% drop in the Spyder Trust (SPY). For the year however AAPL is still up 36.4% while AMZN has gained 30.7% as both have done much better that the 11.7% gain in the SPY.
These two stocks could provide the spark for a year-end rebound in the badly beaten down Nasdaq 100. Both are now approaching important levels of support but are there any signs that the worst of the selling is over?
The severity of the decline in Apple, Inc. (AAPL) is more evident on the daily chart as it closed below the daily starc- band last Thursday. Since early October it has stayed below its 20-day EMA, which is now at $598.
NEXT PAGE: Is a Year-End Rally in the Cards?