Fairlead Strategies provided a technical analysis update indicating bearish developments for the S&P 500 Index (SPX) and specific technology stocks, including NVIDIA Corporation (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL).
The S&P 500 has breached initial support around 5871, falling below the daily cloud level and is now targeting the next support at the 200-day moving average (MA), approximately at 5576.
According to Fairlead's analysis, both short- and intermediate-term momentum gauges for the SPX are trending downward, with no current signs of downside exhaustion. The market internals reveal two oversold extremes, which typically do not suggest a sustainable market low.
NVIDIA stock has recently penetrated its support from the daily cloud near $134. If this breakdown is confirmed, Fairlead Strategies anticipates a bearish short-term outlook for the stock, with a potential target near the 200-day MA around $120.
The technical situation for Apple is also being closely monitored, as the stock hovers near cloud-based support at approximately $232. Should Apple's stock fall further, secondary support is identified at its 200-day MA near $216.
The NYSE Advance-Decline Line, an indicator of market breadth, has shown a short-term counter-trend signal that suggests a temporary improvement in breadth. This improvement could be driven by sectors that were previously lagging, such as healthcare, materials, and energy.
However, this short-term oversold breadth condition exists within a broader context of weak intermediate- and long-term breadth trends, hinting that any improvement might be fleeting.
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