This Tech Laggard Could Get Dragged Back Down

[Trading With Larry Benedict]( This Tech Laggard Could Get Dragged Back Down By Larry Benedict, editor, Trading With Larry Benedict While other high-profile tech stocks rallied strongly this year, Adobe (ADBE) was stuck in a sideways trend. Even an earnings beat in March didn’t lead to positive price action. However, that all changed dramatically [when we checked in on ADBE]( in June (red arrow in the chart below). In the space of five weeks, ADBE had rallied 57%. It briefly pulled back after another earnings beat. But ADBE surged again to fresh new highs. Now momentum is steadily falling. So today I want to see what’s coming next… Recommended Link [Market Wizard who made $95 million for his clients in 2008 – and predicted the 2022 collapse – reveals his strategy:]( [image]( The One-Ticker Retirement Plan How to make all the money you need – in any market – using a single stock. [Click here for the name of the ticker…]( -- An Emerging Rally Reverses…Twice On the left-hand side of ADBE’s chart below, you can see where its year-long downtrend bottomed out last October. ADBE’s fall petered out and reversed as the Relative Strength Index (RSI) rallied out of oversold territory (left red line). Adobe (ADBE) [chart] Source: e-Signal The RSI did break up through resistance (green line), but it was unable to establish any sustained momentum. Instead, the RSI tracked along the top of the support/resistance line from mid-November through mid-January. That kept ADBE in a tight sideways band too. A promising rally tried to emerge but reversed later that month. Then in March, ADBE tried to rally again. The RSI was once again rallying from oversold territory (middle red line). But this proved to be a false signal. The initial positive buying momentum started to wane. ADBE’s rally only got underway when the RSI rallied out of oversold territory for a third time (right red line). The 10-day Moving Average (MA, red line) broke higher and accelerated above the 50-day MA (blue line) in May. And the sharpness of that move showed the strength of the rally. When we looked at ADBE on June 22, though, it had just pulled back from its recent peak at ‘A’ after announcing its Q2 earnings beat. That move coincided with the RSI reversing from overbought territory (upper grey dashed line). ADBE looked overstretched after such a strong rally. So we were looking for a potential move back into the $440–450 range if the RSI tracked back toward support. However, that move failed to play out. Take another look: Adobe (ADBE) [chart] Source: e-Signal Adobe traded sideways for the rest of June. Then it broke higher with two new highs in July (upper orange line). But the RSI is steadily trending lower (lower orange line). And that could soon drag ADBE down. So what am I expecting from here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Falling to Support If buying momentum keeps falling, it will eventually drag the share price lower too. So what happens with the RSI will be key. It is now tracking back toward support (red circle). For ADBE’s longer-term rally to remain intact, we’ll need to see the RSI hold support and remain in the upper half of its range. A break below support could set off a sharp reversal. We also need to keep a watch on the two MAs. They recently started to converge. The 10-day MA breaking below the 50-day MA would add further confirmation of any emerging down move. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Very much happy with recent results and progress. The pace and timing seem more spot on. True smaller premiums but overall a better win rate. Keep up the great work. – Jay H. Hi Larry, I just wanted to say thank you, thank you, for the patient, profitable trades! I agree with your statement, “Sometimes it’s better to make tactful, less-risky trades at a lower frequency. In doing so, we aren’t over-extending ourselves with unintended losses.” I hope the win streak continues... You are on a roll! – Maryanne H. Our spread trading strategy has been very successful in 2023. Since the start of the year, traders could have made over $16,000 trading just one contract for each trade recommendation. If they traded two contracts each time, they’d have more than $32,000. And so on. To learn more about how to trade with us, [simply go right here to watch a recent presentation](. IN CASE YOU MISSED IT… [“Amazon Loophole” Allows Anyone to Collect Payouts]( Amazon. It’s one of the most profitable companies on Earth. Yet, according to Brad Thomas, a multi-millionaire, best-selling author, and former economic advisor to President Trump... What few people realize is, thanks to a little-known IRS loophole — billions of dollars get paid out each year... Required by law! With the next payout scheduled to go out on September 10th! Brad has been featured on Bloomberg, Fox & Friends, Barron’s, CNN, Kiplinger, NPR, MSNBC, and Forbes... But he’s never revealed this secret anywhere... Until now... [Watch the Video Now (Brad Reveals Amazon “Payout” Loophole)]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](