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Tech Stocks Tumble
Stocks were slammed lower yesterday as global yields surged higher on the back of yet another central bank interest rate hike. Following on from the RBA, the BOC hiked rates again yesterday, catching traders by surprise as it warned of inflation becoming entrenched at levels well above target. The move has raised fears that the Fed might opt to press ahead with a further hike, given that the ECB too is widely expected to hike rates further next week.
Weak China Data Adds to Bearish Sentiment
The drop in stocks hit the tech sector hard with Amazon shares plummeting around 5% yesterday, marking the largest single-day loss for the stock since November last year. Further bad news out of China has also hit sentiment in the tech sector. Chinese exports dropped 7.5% in May, raising fresh fears over the health of the economic recovery there. With recession fears growing, the impact on tech stocks looks set to deepen near-term, especially if we see a hawkish surprise from the Fed next week.
Technical Views
Amazon
The failure at the 123.79 level has seen the stock reversing back inside the bull channel highs broken earlier this week. With momentum studies dropping and yesterday’s candle representing a large bearish outside bar, the risks are pointed towards further downside unless bulls can hold back above 123.79. To the downside there is a strong support area around 112.63 where we have the bull channel lows and the rest of the broken bear trend line.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.