Zak Mir on the U.S. New Economy Giants vs Star Trek: Amazon, Facebook, Google and Microsoft

I am such a fan of all things technological that one of the one of the reasons I attempt to remain healthy is to live to see what advances will pan out over the course of the 21st-century. The hope is that at some point we will approach the kind of high-tech heaven seen in Star Trek’s depiction of the 23rd century over the next 50 to 70 years. So that would mean iPhone 80?

On this note I boldly go towards the first chart in my selection which is Amazon (AMZN), both an online retailer and with its Kindles and phones, an innovator of note. What can be seen here on the daily chart to start February is the way that the bears have clearly been caught with their trousers down, something which is said on the basis of the unfilled gap to the upside through the 200 day moving average at $318.

The sheer power of this move is backed up by the way that since the gap to the upside we have seen support coming towards the $350 level, well above the late November/early December resistance. What can be said now is that we would expect further progress here especially while the 10 day moving average, currently trading at $330, remains unbroken. The target over the next 1 to 2 months would be an April resistance line projection at $420 with any pullback towards $350 zone to cool off the overbought RSI regarded as a buying opportunity.

Next up is Facebook (FB) where I am happy to see there has been progress since I called the turnaround in the shares down in the mid-20s dollars a couple of years back. Since then we have seen progressive strength in terms of the price action of this stock, a point which is underlined by the shares remaining wholly above the 200 day moving average now at $71.94 since as long ago as July last year. The suggestion now is that while there may be further consolidation towards the 200 day line, this is an uptrend which should not be underestimated. The best way forward here is probably to regard the 50 day moving average now at $76.96 as a momentum buy trigger and look to the top of the rising April 2014 price channel $90 as the 1 to 2 month target, once the trigger is activated.

Perhaps rather surprisingly, the charting picture at Google (GOOG) has not been as straightforward as one might imagine given the undoubted fundamental strengths that the search engine company has. But at least it can be seen that in the wake of the January bear trap rebound from below former December support and the subsequent higher January low above $500 we have a decent bullish setup, as long as we enforce money management tightly. This would be an end of day close back below the 20 day moving average at $514 as the stop loss. While this remains in place as support the initial target here would be the 200 day moving average towards $549 over the next 4 to 6 weeks.

Finally, a company which may be of the new economy, but where the feeling on a fundamental basis is of a company that is looking for a fresh driver. Such a feeling is underlined on a charting basis by the latest unfilled gap to the downside through the 200 day moving average in February for Microsoft (MSFT), the type of signal which can be a major trend changing one. While we may be happy to give the benefit of the doubt to the stock as long as it remains above the main post June support at $40, this is certainly a situation which is on the watch list in terms of an extended breakdown after the topping out since the autumn on the daily chart.