Bearish activity increased for a number of large capitalization technology stocks, in an environment where the stock market is still rising. Even as bank problems in Cyprus threaten to destabilize the European markets, the Nasdaq index is up 5.6% year-to-date, as measured by the PowerShares QQQ ETF. When Apple Inc. (NASDAQ:AAPL) is equal-weighted, as measured by the Direxion Nasdaq 100 ETF (QQQE), the tech sector is up around 7.6% year-to-date, outperforming the S&P 500, which is up 5.66%:
Investors who hold widely-held technology companies could potentially outperform the broader indices by looking at rising bearish volumes. The broader market is also increasingly bearish: the Nasdaq dropped nearly 1% on March 21 2013. In the table below, companies with a sharp increase in short-selling open interest between Febr15 and Feb 28 2013 are listed in the table below:
|Ticker||NAME||Feb. 28 2013 Volume||Feb. 15 2013 Volume||Avg. Daily||% Change|
For illustration, short-selling for Apple Inc. (NASDAQ:AAPL) shares is up 3.5%, as investors are unwilling to buy until the company releases more products to bolster profits. The challenge for Apple is that it is already a very large company, with a market capitalization of $425 billion. New phone releases based on the Android operating system, including the Nexus 4, HTC One and Samsung Galaxy S4, will likely pressure sales for the iPhone 5.
Apple’s share price will be dominated by sentiment, so predicting its direction in the short-term will be difficult.