Weekly chart review

wedges are common

A lot of the tech names are forming wedges and are either breaking down from them or are just very flat in this week. Apple is at the upper end of its very narrowing wedge. This sort of chart formation is similar to that in AMD, less so in Amazon, CVNA, MSFT, a little bit in NFLX (although NFLX is really more flat than anything else since July), NVDA has also been very flat since September, and QQQ itself has been flat since September. Shopify is starting to trend downward and has been stalled since July. Its pandemic boost cannot be sustained of course so there’s likely to be a correction at some point. TSLA is also forming a wedge but seems to have actually broken below it and is now firmly below the lower parallel.

low flyer aided by occasional gusts of wind

There are many other names which are forming very different chart formations. Some are breaking out, some are have broken out and are falling back and collapsing, and others are sharply falling so this week has seen a much more divergent and variegated pattern of charts with each company doing its own thing rather than a general trend where everything was going up.

It really has been since September, although others have been since July, where you have generally a stalled chart formation. Of course post pandemic names are getting a boost. Thus there have been some recent breakouts, such as Uber. But there have also been some notable breakdowns, such as ZM. The most spectacular chart of all seems to be NIO and having gone up so much within one year this week it has experienced a massive increase in volatility and looks to be topping out given the very wide daily price action (which had not been seen before). This is behaviour you often see at the end of a bubble.