Futures for the S&P 500 index were little changed late Tuesday after the benchmark S&P 500 retreated for a third straight session. Facebook (FB) and Netflix (NFLX) remained trapped below their 10-week moving averages and recent buy points. Fellow FANG stock Alphabet (GOOGL) held above its 10-week line and entry point. Dow industrials components Microsoft (MSFT) and Intel (INTC) held above their 10-week support lines, though Intel is quickly approaching that area.
S&P 500 index futures were just below fair value. Dow and Nasdaq 100 futures rose 0.1%
The 10-week moving average is the sum of a stock’s weekly closing prices over the 10 previous weeks, divided by 10. It’s essentially a weekly version of the 50-day moving average. The 10-week/50-day line is important because it is often used by mutual funds and other big institutions to add shares. Individual investors can use high-volume rebounds from this support area as a possible buying opportunity.
Facebook fell below its 50-day and 10-week averages as well as its 175.59 buy point last Friday, then lost more ground on Monday. Shares quickly fell to 169.01 on Tuesday, but rebounded to as high as 175.38, nearly recovering those key technical levels. But as the Nasdaq reversed lower, Facebook pared gains to close up 0.8% at 172.83. Facebook’s relative outperformance in Tuesday’s stock market trading offers some hope for investors that the social giant can recover.
Netflix rose 0.1% to 184.21 after reaching 188.14 intraday. That stemmed a four-day slide, but the internet TV pioneer is stuck below its moving averages at a prior 190.05 buy point. Investors also could look at a 204.48 entry in a new base-on-base formation.
Google-parent Alphabet initially fell to 1,002.32, undercutting its 1,006.31 buy point and 50-day moving average, but rebounded to rise 0.8% at 1,019.60. That’s still below the stock’s 10-week line after it briefly crossed that level before the Nasdaq’s reversal.
Microsoft has been consolidating since Oct. 27, the day after reporting strong quarterly earnings as cloud-computing revenue soars. Shares were trading tightly up until Monday, when shares fell 3.8% to 81.08, just above its 50-day line and just below its 10-week. Microsoft rose 0.6% to 81.59 on Tuesday, just retaking its 10-week line.
Microsoft appears to be on track to form a new flat base that would offer an 86.30 entry. The tech titan has made a series of consolidations and breakouts, but it’s struggling to make much progress before forming yet another pattern. Pullbacks to the 50-day/10-week line might represent better buying opportunities if the stock rebounds strongly in high volume.
Intel, the other half of the one-time Wintel duopoly and also a Dow component, has been pulling back constructively since peaking at 47.30 on Nov. 3. But shares fell 2.4% to 43.44 on Tuesday, closing in on the 50-day and 10-week lines.
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