2 Tech Stocks That Could Fade Into the New Year

Both AKAM and SYMC have approached historically bearish trendlines

Managing Editor
Dec 12, 2018 at 12:06 PM
facebook X logo linkedin

Despite today's gains, the tech sector has been stumbling into the New Year, still reeling from October's sell-off. If history is any guide, there could be more trouble ahead for cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM) and cybersecurity name Symantec Corporation (NASDAQ:SYMC), both flashing bearish signals heading into 2019.

AKAM Headed Toward Familiar Resistance

Akamai stock, at last check up 1.8% to trade at $68.76, is now within one standard deviation of its 80-day moving average. Over the past few years when encountering this trendline, AKAM went on to average a one-month loss of 8.9%, and was higher just 20% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

A move of similar proportions would put Akamai stock back near the $62.50 level, an area that has contained pullbacks all year. Three straight wins this week has helped put AKAM above its year-to-date breakeven level, although that 80-day trendline, which has served as resistance since mid-September, still looms overhead. Longer term, the equity hasn't had a monthly win since July. 

Daily Stock Chart AKAM

In the options pits, the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.37, which ranks in the lower 6th annual percentile. In other words, options traders seem relatively upbeat, with data showing a higher-than-normal preference for near-term calls over puts.

SYMC Showing Signs of a Slowdown

Looking at Symantec, the stock is within one standard deviation of its 200-day moving average, after a lengthy stretch below this trendline. Over the past three years, there have been four similar run-ups to this moving average, after which SYMC went on to average a one-month loss of 7.19%, and was higher just 25% of the time, per data from White.

Daily Stock Chart SYMC

Symantec stock at last check was up 3.6% at $23.12, so a pullback of similar magnitude would bring it back near $21.50, a region that's been somewhat supportive recently. SYMC bounced nicely off its late October lows near $17.50, but has still shed nearly 18% in 2018. 

The sentiment in the analyst community is tremendously bearish. Of the 22 brokerages in coverage, 21 rate SYMC a "hold" or worse. What's more, the stock's average 12-month price target of $22.65 sits right at its current perch. This indicates that another pullback from the cybersecurity name won't catch analysts off guard and result in bear notes. 


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI