Stocks finished the day lower, with the S&P 500 dropping by 1.1%. We appear to be in a distribution pattern right now, churning at the top of the range. Wednesday, we closed right above the lower uptrend, which helps form the diamond pattern in the S&P 500.
Again, as I have noted for a few days, I think we see 3980 based on this pattern. Typically, these are reversal patterns, and they tend to return to the origin of the move higher which is lower than 3,980, but I am using that level because I believe there should be support there.
NASDAQ Invesco QQQ Trust ETF
The pattern on the QQQ is a diamond too, but only the top half. The red line is the mid-point and support, currently around $307. For now, I think the QQQ can fall back to $300, maybe a bit lower, for the same reason as the S&P 500 dropping.
Advanced Micro Devices
Advanced Micro Devices (NASDAQ:AMD) comes to an exciting point—the shares managed to rally up to the downtrend. It even managed to almost push through the downtrend, but it hasn’t been able to in the end.
The big level of support for AMD comes to around $100, and that is the level that will need to hold. Otherwise, a retest of the recent lows could be coming, based on the technical setup.
Roku
Roku (NASDAQ:ROKU) had a big day, with the shares rising on rumors of Netflix (NASDAQ:NFLX) buying it. Roku used to be part of Netflix a long time ago, and then Netflix decided not to pursue the business.
If I remember correctly, the premise was that Netflix wanted to be neutral and wanted to be able to get on all of the different streaming media devices. I find it odd that Netflix would now like to go back to Roku.
Yes, Roku has an ad model, but that isn’t going to solve Netflix’s problem. Anything is possible, and the technical chart remains bullish for ROKU after the stock climbed out of that falling wedge pattern and that positive RSI.
Adobe
There may be another leg lower coming in Adobe Systems (NASDAQ:ADBE), and with the company due to report results next week, we may not have to wait too long to find out.
The shares have been channeling lower now for some time, and the momentum on the RSI is also at a downtrend. So while the stock is trying to turn bullish, I don’t think that time is now.
Given where the stock is, it seems like we are destined to find out very soon what the future path for Adobe will be.
