Technology stocks closed this Friday in red, Amazon fell 5.45%, Apple 5.6% and Facebook 6.3%.
The attention of investors is currently focused on the upcoming presidential elections
The coming months will be highly competitive for the technology sector
Concerns about sluggish economic growth in the midst of the ongoing pandemic continue to dominate the financial markets. The pandemic pushed U.S. hospitals to the edge of capacity as the number of coronavirus cases exceeded the 9 million mark last week and U.S. stock indices weakened.
Amazon’s stock fell 5.45% after predicting a surge in costs related to COVID-19. Apple plunged 5.6% after posting the sharpest drop in quarterly iPhone sales in two years, while Facebook shares fell 6.3%.
Investor attention is also currently focused on the negotiations for the U.S. stimulus package and the upcoming presidential elections. The U.S. presidential election will be held on November 3, and according to the polls, U.S. President Trump’s rival, Joe Biden, is leading.
Democrats and Republicans are using a coronavirus stimulus package as an electoral tool, both parties have reported “progress” but have widened the discussions. The chances of a relief bill being passed before November 3 are slim, as it would still have to be passed by Congress.
The drug manufacturer Pfizer announced that it may have a coronavirus vaccine ready in the United States by the end of this year. Vaccines and treatments are still being researched and developed, but there is no patent solution yet.
Nor will there be one in the foreseeable future. And that means more economic shrinkage or, in the best case, slow growth.
Amazon shares remain in a bull market
As long as Amazon’s price is over $3,000, this stock will remain in the “buy” zone and there are no signs of a trend reversal.
Data source: tradingview.com
On this diagram I have marked important resistance and support levels. The important support levels are $3,000 and $2,800, $3,300 and $3,500 represent the resistance levels.
If the price jumps above $3,300 it would be a signal to buy Amazon shares and we have the open path to $3,500. A rise above $3,500 supports the continuation of the uptrend, and the next price target could be around $3,600.
On the other hand, it would be a “sell” signal if the price falls below $3,000, and we have the open path to $2,900.
Apple has found strong support above $100
Apple stocks weakened last week after posting the sharpest drop in quarterly iPhone sales in two years. I believe that the price of this stock may fall even further in the coming days, and perhaps this is not the best time to invest in Apple.
The risk/reward ratio is not good at the moment and I think there are many other stocks with more opportunities.
Data source: tradingview.com
On this diagram I have marked important resistance and support levels. The important support levels are $100 and $90, $120 and $130 represent the resistance levels. If the price jumps above $120 it would be a signal to buy Apple stock and we have the open path to $130.
A rise above $130 supports the continuation of the upward trend and the next price target could be around $150. On the other hand, if the price falls below $100, this would be a strong “sell” signal and we have the open path to $90.
Facebook shares are trading below the $300 mark again
Facebook’s shares have weakened last week, but even with the COVID 19 pandemic, Facebook’s business is doing well. Facebook is moving to monetize WhatsApp messaging, and this will allow companies to sell products within the app.
Data source: tradingview.com
On this diagram I have marked important resistance and support levels. The important support levels are $260 and $240, $280 and $300 represent the resistance levels. If the price jumps above $280 it would be a signal to buy Facebook stock and we have the open path to $300.
A rise above $300 supports the continuation of the upward trend for Facebook, and the next price target could be $320 or even $330. On the other hand, it would be a strong “sell” signal if the price falls below $260, and we have the open path to $240.
Summary
The U.S. presidential election, the Federal Reserve monetary policy meeting and the release of the October Nonfarm Payroll report will all take place next week. The US stock market is under pressure from the Covid 19 pandemic environment and the coming months will be competitive for the technology sector.
