Technology stocks got walloped today, and what looked was going to be a very an excellent quarter for some these company, is becoming just ordinary. It started with worries about concerns over Apple and the potential lack of demand for the new iPhone a few days ago and started spreading. Apple is likely the key to technology shares over the next couple of weeks.

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As of Friday, September 22, shares of Netflix were up by over 25 percent, and Facebook was up by nearly 13 percent, the Technology Select Sector SPDR was up by almost 7 percent. This was versus an S&P 500 that was up mere 3.25 percent for the quarter. But suddenly today the air seemed to start coming of the technology names, outside of Apple.


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Netflix and Facebook both fell by nearly 4.5 percent today alone, the question on top of mind everyone’s mind, one day blip or more to come?  Facebook shares seemed to experience a lot of technical damage today, coming on convincing volume. However, Netflix chart still looks relatively healthy. But Apple may hold the key to the future of the other technology names, and Apple may have found a bottom today.

 Apple Facebook Netflix

XLK data by YCharts

Apple’s Bottom?

Apple shares have fallen by nearly 10 percent since the iPhone event on September 12. There appear to be some signs perhaps that bottom is being put in place in the stock. The 15-minute chart below shows how Apple has filled the gap created after jumping following its quarterly results in August. The chart is still directionally bullish, and with the gap filled, it may be a sign that perhaps a bottom is being put in place for Apple.

Apple Fills The Gap by Scorpio244 on TradingView.com

 

Facebook Broken?

Facebook took a hard hit, and what is the most surprising about today’s move is that chart had such a positive setup before today. If Facebook has broken technically, it is easy to see that the stock has a while to fall before find support at around $150.  Today’s move also came on a surge of volume which makes today’s decline more convincing.

FB by Scorpio244 on TradingView.com

Netflix Still Looks OK

Unlike Facebook, shares of Netflix did not fall on a surge in volume. The chart below shows how shares of Netflix were in overbought territory. The move lower in Netflix was not as damaging to the chart as the one that can be seen on Facebook.

NFLX by Scorpio244 on TradingView.com

Apple is still the key to the technology stocks, and the technicals suggest that a bottom may be getting put in place for the stock. If that is the case, then today’s technology sell-off likely coming to a close.

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Michael Kramer and the clients of Mott Capital own shares of NFLX and GOOGL

Disclaimer : Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.