Tickers in this Article: GE, XOM, T, WMT
Mega caps are stocks that have over $100 billion in market capitalization. They are generally well known and their performance plays a crucial role in investor confidence and in the performance of major indexes. As the market continues to churn within a correction over the last two months, there has been a stark contrast in the performance of mega cap stocks during that time. Two have been lagging - even when the market was rising earlier in the year - while two other mega caps have been stacking up impressive gains during this correction.

SEE: Blending Technical And Fundamental Analysis

General Electric (NYSE:GE) hasn't been able to gain much ground in the last year, being primarily stuck below $20. $19.50 to $20.50 is a strong resistance zone for the stock and a breakout above this region is bullish. The target price if the breakout occurs is $23. On the other hand, if that resistance can't be broken the stock is likely to continue to channeling between $18 (support) and $20.50, or it will break to the downside. If the stock breaks below $18, the downside target is roughly $15.50. On a positive note, on-balance volume in the stock is rising. Also, the recent surge in volume on the most recent decline shows there is strong buying interest near $18.

Exxon Mobil (NYSE:XOM) also hasn't made much progress over the last 12 months. From January to May, the stock tried to break above $88, but was unable to. For a longer-term uptrend to emerge resistance at $88 will need to be broken. Since the start of May, the stock has been moving lower, recently finding support just above $77. A drop back below $77 indicates further declines, potentially targeting support at $74. Short-term resistance is at $82 to $83. The recent volume spike at the end of May came in on selling and volume has not picked up significantly since. This indicates there may continue to be some underlying weakness.

SEE: How To Use Volume To Improve Your Trading

AT&T (NYSE:T) has been flying higher and it doesn't seem to matter what the market does. On June 13 the stock put in a new 52-week high as it continues to move in a tight trend channel higher. If that channel holds and the stock continues to move within it, the stock could reach $36 by the end of June. But with the market diverging (moving lower while AT&T moves higher), there is cause for some caution at these levels. Indicators such as the MACD and on-balance volume are leveling off and not creating new highs as the price does. A downside breakout of the tight trend channel, at $34, could trigger some profit taking. Primary support is at $32.50 to $32.

Walmart (NYSE:WMT) has also been trending higher as the market has struggled over the last couple of months. From January to the middle of May, the stock was stuck below $63 (unadjusted) and lagged the market. Since breaking above $63, Walmart has been diverging with the market, recently putting in a fresh 52-week high at $68.48 on June 11. A rise above $68.48 could spark more buying and a test of $70. On-balance volume is leveling off though. Unless volume can increase to keep the rally going, the stock could stall. $66 to $65 is the current support area. If $65 is penetrated, the downside target is $62 to $61.50.

The Bottom Line
These mega cap stocks are watched by a lot of investors and do a significant amount of volume. As the market continues to try to find footing, if the strong mega caps break to the downside it will be a bearish indicator not only for the stock but also for the broader market. Trend changes in these stocks are significant, so watch support and resistance levels for signs the tide may be turning.

SEE: Using Technical Indicators To Develop Trading Strategies

At the time of writing, Cory Mitchell did not own shares in any of the companies mentioned in this article.

Charts courtesy of Stockcharts.com.

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