You may not be able to blame the semiconductors for the weakness in technology. But you can certainly blame the Nasdaq for the overall weakness in the markets on Monday.
While the Dow dropped by less than 1% and the S&P 500 traded lower by just over 1%, it was the Nasdaq that saw the most significant selling of the three, losing one and a quarter percent to start the trading week.
The lower finish in the Nasdaq takes the index down to its lowest levels of December. And the leading tracking ETF for the Nasdaq, the ^QQQ^, which tracks the Nasdaq 100, closed in oversold territory for a fifth day in a row.
Which stocks are leading the Nasdaq lower on Monday? Some of the indexes bigger decliners on the first trading day of the week were lesser lights like ^CMED^ and ^CECO^, both of which dropped by well over 8%. But there are some Nasdaq stocks that are not only pulling back but doing so above the 200-day moving average that traders might want to keep an eye on over the next few days.
More interestingly, all three of the stocks in today’s report are name-brand stocks, many of which are just off major, long-term highs.
For example, shares of ^FFIV^ rallied to their highest level since July at the beginning of December. But selling in the stock in recent days has taken shares lower by more than 11%. Heading into trading on Tuesday, shares of FFIV have dropped for five out of the past six trading days and are now oversold above the 200-day moving average.
Trading at new, 52-week highs as recently as last week, ^ROST^ is experiencing a dose of profit-taking after rallying to new highs intraday on Monday.
ROST closed down by well over 1% in Monday’s trading, but is still above the lows of its most recent trading range, a range that extends back to the beginning of the month.
Both FFIV and ROST have short-term, positive edges of less than 1%. Additional selling and deeper pullbacks in these stocks over the balance of the week will likely increase those edges.
One stock where the positive edges are significantly greater is ^SNDK^. Shares of SNDK pulled back by more than 2% on Monday, finishing lower for six days in a row ahead of Tuesday’s open. As such, the stock, which closed in oversold territory on Monday, has a positive, short-term edge that is well above 1%.
All of the stocks in today’s report were available from research and data available through the Machine. To learn more, click here.
David Penn is Editor in Chief of TradingMarkets.com