2 Tech Stocks That Could Fade Into the New Year

Tech stocks have been under heavy scrutiny in recent months

Despite today's gains, the tech sector has been stumbling into the New Year, still reeling from October's sell-off. If history is any guide, there could be more trouble ahead for cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM) and cybersecurity name Symantec Corporation (NASDAQ:SYMC), both flashing bearish signals heading into 2019.

AKAM Headed Toward Familiar Resistance

Akamai stock, at last check up 1.8% to trade at $68.76, is now within one standard deviation of its 80-day moving average. Over the past few years when encountering this trendline, AKAM went on to average a one-month loss of 8.9%, and was higher just 20% of the time, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

A move of similar proportions would put Akamai stock back near the $62.50 level, an area that has contained pullbacks all year. Three straight wins this week has helped put AKAM above its year-to-date breakeven level, although that 80-day trendline, which has served as resistance since mid-September, still looms overhead. Longer term, the equity hasn't had a monthly win since July.

In the options pits, the security's Schaeffer's put/call open interest ratio (SOIR) comes in at 0.37, which ranks in the lower 6th annual percentile. In other words, options traders seem relatively upbeat, with data showing a higher-than-normal preference for near-term calls over puts.

SYMC Showing Signs of a Slowdown

Looking at Symantec, the stock is within one standard deviation of its 200-day moving average, after a lengthy stretch below this trendline. Over the past three years, there have been four similar run-ups to this moving average, after which SYMC went on to average a one-month loss of 7.19%, and was higher just 25% of the time, per data from White.

Symantec stock at last check was up 3.6% at $23.12, so a pullback of similar magnitude would bring it back near $21.50, a region that's been somewhat supportive recently. SYMC bounced nicely off its late October lows near $17.50, but has still shed nearly 18% in 2018.

The sentiment in the analyst community is tremendously bearish. Of the 22 brokerages in coverage, 21 rate SYMC a "hold" or worse. What's more, the stock's average 12-month price target of $22.65 sits right at its current perch. This indicates that another pullback from the cybersecurity name won't catch analysts off guard and result in bear notes.