Stocks slide late after Kerry condemns Syria
Stocks in the US continued the same lackluster movement with the exception of the Nasdaq which has been propelled by large cap technology stocks such as Facebook and Microsoft. Last week’s announcement on Friday that Steve Ballmer the CEO of Microsoft (NASDAQ:MSFT) has decided to retire, propelled the stock more than 7% on Friday, boosting the technology sector toward resistance levels.
Facebook was the star of the show last week, closing above the $40 per share level for the first time in its history. The stock closed at an all-time high propelling the technology index. Upside call option purchases on the large social network company has been very active during the past two weeks. The $40 dollar strike has the most significant open interest of more than 2600 contracts, which will generate short covering if prices continue to move higher. The call to put ratio printed at 3:1 on Friday which indicates upside optimism for the stock price.
One negative for Facebook bulls is shorts have basically covered most of their positions according to the days to cover index. Currently shorts only need 1 day to cover the volume needed eliminate the outstanding volume of short positions which is low relative to FB peers.
Technically, Facebook has broken above resistance levels at $39.20 and is poised to test the intra-day highs seen during its IPO near $43 per share. Volume on Friday was the highest seen during the month of August.
The Nasdaq was the best performing of the major indices as stocks slid late after Secretary of State John Kerry said Monday that the Syrian government’s use of chemical weapons against civilians is a moral obscenity, delivering the clearest message that the Obama administration is preparing to attack President Bashar al-Assad’s regime. Prior to his statement at 3PM EST stocks were trading slightly positive but quickly moved into the red.
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