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The heavy hitters in technology are starting to get some attention from the chart watchers as we head into the last month of the year. Typically, this is when we'll start to see some window dressing begin, which means that the larger tech names are likely to see some volatility.
Our daily screens picked up Tesla Motors Inc (NASDAQ: TSLA ), Facebook Inc (NASDAQ: FB ) and Microsoft Corporation (NASDAQ: MSFT ) as potential volatility candidates as the month of November comes to an end and each of these big names has a technical story building.
Tesla Motors Inc (TSLA)
Moonshots and solar roofs appear to have more impact on the actual function of Tesla to build cars. At least that's how it appears in the news. TSLA is beginning to see some signs of real competition in the market, coming from the high-end luxury cars. While Tesla will likely always own the "cool" factor in electric cars, the competition won't help business.
TSLA stock is headed for a technical squeeze play that is likely to see the shares make a fast and aggressive directional move. Recent activity in the shares has seen a throttling of the Bollinger Bands around Tesla stock . This indicates that we are likely to see a break of the bands in the near future, a move that causes volatility itself.
Almost all of TSLA's trendlines are positioned above the stock, ready to act as resistance. This has been the case and has helped to lull shares into a low-volatility decline that is pressuring the important $180 support level.
Expect to see this support level tested in the next week and technical traders to react to a break of $180, which is likely to open a target to the $150 support level that the market provided last February.
Facebook Inc (FB)
Acting counter to the post-election rally, Facebook shares have slumped as much as 14% after the election on several news items including the social media website's ability to handle "news" and also some signs that the advertising model continues to slow.
Shares of FB are in the process of challenging their 200-day moving average again. This significant trendline was supportive of the shares a little more than a week ago, but the second test of a trendline like this in such short order is normally more critical.
Momentum on Facebook shares show a stock that continues to be stuck in the mud. Moving forward for a few inches only to move back by more. The result is a declining 50-day moving average, which is indicative of a bearish intermediate-term outlook for FB.
Another break below the 200-day will bring a likely move below the lower Bollinger Band at $115 and spur selling of Facebook stock. Overhead resistance is waiting at the $125-mark. Within the confines of the technical outlook, FB is a hold at best with some significant downside risk.
Microsoft Corporation (MSFT)
Offsetting the technical worries of FB and TSLA is slow and steady Microsoft. MSFT's shares are now pacing to new all-time highs with little attention from the market, which is exactly what we like to see.
Microsoft shares are now pressing above the $61-level. Due to the recent consolidation at this mark, MSFT stock should be able to successfully turn this into new chart support, meaning that the technical traders will begin to buy on dips to and below this price.
Momentum, per Microsoft stock 's MACD and RSI readings, should continue to build with little pressure from becoming overbought given the pace of the rally.
Historically, MSFT performs well through the months of June through February, either matching or beating the S&P 500 's performance each month. For now, Microsoft remains a hold for the technical traders based on this seasonality and the current technical trends.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
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