Sell: MSFT
MSFT has fallen below its 7-month uptrend line, shows relative weakness versus the overall market, and, like the other investor darling of the pandemic era - AMZN, it also shows weakness versus BIGTECH. TPA sees MSFT falling further or, at least, underperforming in the intermediate-term. The chart below shows MSFT’s recent uptrend violation.
The zoom chart reveals that the recent tepid rally merely puts MSFT at breakpoint resistance. MSFT versus S&P500 has also fallen below the recent uptrend line, showing new underperformance.
The long-term chart of the ratio MSFT/S&P500 shows that the outperformance since March has put MSFT/S&P500 well above the long-term uptrend line setting up a period of a return to the long-term normal or a period of underperformance.
Finally, the ratio of MSFT/TPA BIGTECH (top 8 names in the Nasdaq 100) shows that MSFT has actually been underperforming its giant peers since June. TPA will use today’s opening price as cost for this recommendation.
Sell: AMZN
AMZN has fallen below its 7-month uptrend line, shows relative weakness versus the overall market, and, like the other investor darling of the pandemic era - MSFT, it also shows weakness versus BIGTECH. TPA sees AMZN falling further or, at least, underperforming in the intermediate-term.
Chart 2 shows how AMZN exploded as the Pandemic unfolded and its services became a mainstay of life with Covid-19. The crisis is far from over, but other companies have stepped up to deal with the crisis. AMZN is precariously situated after its trend break.
As with MSFT. AMZN/S&P500 has fallen below the recent trend (chart 3) and is now far above the long-term uptrend (chart 4). Charts 3 and 4 hint toward upcoming underperformance versus the overall market.
Finally, the AMZN/TPA BIGTECH reveals that AMZN has begun to underperform its giant peers. TPA will use today’s opening price as cost for this recommendation.
