- Stocks of Microsoft, Intel and Amazon record fresh all-time highs after crushing Wall Street earnings estimates.
- The heavy volume surge that accompanied the rally may indicate a blow-off top.
- If my read is correct, we could see a wider and deeper correction for the stock market.
Last week, many tech stocks jumped in value after crushing Wall Street expectations for the quarter ending December 231619. Among those names that beat consensus estimates were Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC) and Amazon (NASDAQ: AMZN). All three tech stocks soared in after-hours trading in response to a strong holiday quarter performance.
A few days later, the excitement from the earnings beat has dissipated. Amazon, Microsoft and Intel are all struggling to keep their bullish momentum alive. What’s worse, there are signs that a local top is in for these three stocks. If my read is correct, then it might be a sign that the smart money is cashing out.
Amazon, Microsoft and Intel Climbed to All-Time Highs After Earnings Beats
In stock investing, gurus always say to “buy the rumor; sell the news. ”As an experienced trader, I’ve seen countless retail investors get suckered into buying the news that’s supposed to ignite a rally. Unfortunately, institutions almost always take that chance to dump their positions.
We’re seeing the same script play out this earnings season. Amazon , Microsoft , and (Intel ) all delivered great numbers that strengthened the fundamentals or the intrinsic value of the three companies. The knee-jerk reaction of investors sent these stocks flying to their all-time highs.
However, more signs that the stock market is due for a nauseating plunge are emerging. The pullbacks in AMZN, MSFT and INTC may just be the beginning of a wider and deeper correction.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer does not own any shares of the companies or markets mentioned.
Last modified: February 3, (1: PM UTC