Netflix Inc (NASDAQ:NFLX) was a leading stock that has struggled since reaching the $300.00 level in early July. This afternoon, the stock is trading lower by $6.00 to $111.33 a share. This stock is clearly not participating in today's rally. NFLX is trading below its daily chart 50 and 200 moving averages. This tells us that the stock is in a weak technical position at this time. NFLX stock is weak relative to the major stock indexes which are trading above their daily chart 50 moving averages. This stock could see lower prices on any downturn in the market as it will likely lead the declines.
Green Mountain Coffee Roasters Inc (NASDAQ:GMCR) has been under severe selling pressure over the past two trading days. This stock will have some short term support on the daily chart 200 moving average around the $74.00 area. The stock is a bit oversold at this point so it might be due for a short term bounce. In any case, this stock is weak relative to major stock indexes.
All of the Chinese ADR's are under some selling pressure this afternoon. Last night, the important Shanghai finished lower by more than 2.00 percent. If there is a Chinese economic slowdown, stocks such as Netease.com (NASDAQ:NTES), Sohu.com Inc (NASDAQ:SOHU), and other leading ADR's could be under pressure.
Traders and investors must remember that stocks which show weak relative strength when market indexes rally are likely to trade lower on any stock market pullbacks. These stocks are under pressure today despite a 200.00 point rally in the Dow Jones Industrial Average and are likely to trade lower when the stock indexes decline.
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