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Small Caps Score, Big Caps Sore

The either/or market chops on -- and let's look at Tesla, Shopify, Workday and more.

The Market

Just when you thought the market couldn’t go down, the big-cap index movers took the S&P 500 and Nasdaq down.

Of course, since this is still an either/or market, the small caps took the lead and rallied today.

There was very little change in the indicators, so I’ll note we are still short-term overbought and now just two days from an intermediate-term overbought reading. I still think this whole week could be choppy, but I am still looking for a pullback in the latter part of April.

Just to show you what choppy looks like: The S&P closed last Friday at 4128. Today, three trading days later it stands at 4124. Nasdaq closed at 13900 and now stands at 13857, while the Russell closed at 2244 and stands at 2247. That’s a whole lot of chop. The DSI did back off since the indexes fell and since the Volatility Index had a minor rally, the DSI for the VIX went up a smidgen. The real change was in the Investors Intelligence bulls since they are now at 63% back to where they were as we entered December. It led to a very minor 2% correction and a whole lot of sideways for nearly three weeks.

New Ideas

A lot of tech stocks that rallied well yesterday gave back much of those gains today. What they have done is come back to their "breakouts." In the days ahead as the market works off the overbought reading and pulls back, I am going to pay close attention to these types of charts to see if the selling can dry up or if yesterday’s move was a fake-out. Let’s start with two that I have liked. Workday (WDAY:Nasdaq) and Shopify (SHOP) - Get Free Report. This $255-ish area is important on Workday. It doesn’t ruin the chart if it breaks, but clearly it would be better if it holds.

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Shopify has this $1,150 area to watch. If it can’t hold, then that gap near $1,100 should come into play.

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Tesla (TSLA:Nasdaq) did fill that gap we discussed yesterday, where I thought profit taking would be a good idea, but now that $700 area is what needs to hold.

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Roku (ROKU:Nasdaq) we haven’t looked at lately, but it has the same pattern. That $360 area needs to hold.

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I am sure you can find others that look like these but I thought these were good examples of the general look of these high flying tech stocks.

Today’s Indicator

The Volume Indicator is at 51% and is just about overbought again.

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Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

QuantumScape (QS) - Get Free Report is teetering here. There are only so many times you can pound away at support before it gives way, so a break of $40 would be bearish with a measured target – ultimately — down near $20. It needs to hold and it needs to do it fast.

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I got sucked into Big Commerce (BIGC:Nasdaq), when it curled under in January and then I got spit out as it gave it all back. There is plenty of resistance at $60, so I’d be in favor of waiting until it was able to get over it, and do so like it means it. If the market was currently oversold I’d be OK, with bottom fishing, but it isn’t so I’d rather wait.

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I will say this about ViacomCBS (VIAC:Nasdaq): If it is going to hold and be OK, then this is the spot. So the risk/reward is pretty good here, since if it falls under $40, you know you are dead wrong.

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