Was Tuesday's downdraft just a shakeout of and a bear trap for short-sellers, or the beginning of further weakness in the FAANGs + 5 Tech stocks that make up the BMO REX MicroSectors FANG Index 3X Leveraged (NYSE:FNGU)?
Keep an eye on the ROC and the zero level on Chart #1 below. It's shown with an input value of 12 days (its default setting).
So far, only Apple (NASDAQ:AAPL) and Tesla's (NASDAQ:TSLA) ROC has dropped below zero. If the others follow suit in the coming days, we may see a big selloff occur in Tech, overall.
Chart #2 shows an ROC input value of 1 day to give you an idea of overactive price movement from one day to the next.
After Tuesday's drop, the ROC on Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOG) are notable as they approach 6-month triple-bottom lows...FNGU isn't far behind. A drop and hold below this triple bottom on these may negatively influence the others...in particular, keep an eye of Facebook (NASDAQ:FB) and Amazon's (NASDAQ:AMZN) ROC for any evidence of increasing selling strength.