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Software Sector Starts To Fall Apart. Broader Sell-Off Ahead?

ByMichael Kramer
Published 07/15/2020, 01:36 AM
Updated 09/20/2023, 06:34 AM

Invesco QQQ Chart

Workday

Some of these software stocks have seen real damage. Workday (NASDAQ:WDAY) drop below an uptrend that has been rising against since March. The stock could be on its way lower to $169.

Workday Inc Daily Chart

Splunk

Splunk (NASDAQ:SPLK) also broke an uptrend, and that could indicate a decline to $170, is coming.

Splunk Inc - Daily Chart

Datadog

Datadog (NASDAQ:DDOG) also broke an uptrend, maybe with a push down to $80.

Data Dog Inc Daily Chart

Adobe

Adobe (NASDAQ:ADBE) came close…

Adobe Inc Daily Chart

It isn’t a coincidence this happened because these all move together, but I’m not sure what it means. It could be the start of a broader sell-off in the group, and thus the QQQs. Or it could merely be a one day glitch and we resume the uptrend today.

I would tend to think it is not a glitch and that it is the sign of a broader sell-off, but only time will tell, and I will continue to watch these names closely, as you should too.

Original Post

Latest comments

Yes, sw feels even heavier now than in the last two false starts for the reopening trade. But this might occur in other subsectors because of politically-forced reopenings that occurred months too early. I’m from NJ and know 4 people who died from Covid. From my vantage point, it seems WAY too early to sell tech to buy a mean reversion value/reopening trade, as deaths in CA, AZ, FL, TX and many other states are just beginning to rise, and businesses there will be forced to shutter. Worse, the market believes a safe vaccine will quickly be developed AND distributed, and that people will soon be playing sports, flying, going to DIS, movies, restaurants, work and schools. They’re buying hope, not the reality that there will be no sports or full-time in-classroom schooling in ‘20. LA/SD/ATL schools have it right, and NYC will soon follow. Most cos will provide no Q3 guidance, so we’ll be flying blind and navigating using charts all the way back down to a sub 3000 S&P.
I sold NVidia when you mentioned in the last article that if Nvidia goes below 400 then next stop is 380. now it is back to 417...
why would you listen to anyone?.
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