Technology bulls started steady on Tuesday, however, persistent selling for cyclical and defensive sectors took a toll. The Nasdaq 100 closed at 15,038, a loss of 1.1%, states Jon Markman, editor of Strategic Advantage.
The weakness for the benchmark means that the NDX was unable to close above its rising 50-day moving average at 15,176. This is unfortunate because bulls are firing a lot of bullets this week, giving cover to early 2023 leaders such as Nvidia (NVDA).
The Santa Clara, Calif.-based chip designer got a second batch of upgrades on Tuesday as analysts at UBS and Wells Fargo raised the price target for shares to $540, and $500 respectively. Nvidia shares were upgraded on Monday at Morgan Stanley.
Coincidentally, shares of Oracle (ORCL) have also been on the move higher. Oracle is a Nvidia adjacent firm because the companies are working closely to roll out AI for enterprise strategies. Oracle rallied Tuesday to $117.29, a gain of 1.5%.
Unfortunately, the relative strength of Nvidia and a few other issues was not enough to offset the persistent weakness in Apple (AAPL) and Tesla (TSLA). Those issues have come under pressure recently after both firms reported stronger than expected financial results that were met with aggressive selling.
Bears say shares reflect all possible good news as consumer spending slows. That sentiment, and persistent selling in the energy, financial, materials, and utilities sectors, eventually pulled everything lower. There simply are not enough stronger stocks to offset weakness for a few big capitalization firms.
The NDX is slightly below its 50-day moving average, and bulls can’t seem to lift it beyond that level. There is a chance that everything will fall apart for bulls, however, it doesn’t seem as though that is going to happen. Critical support for the benchmark is now 14,687, the 26 low.
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