Semiconductors Have Rallied for Four Days. Can They Make it Five in a Row?
Not much changed in the market today, with the broadening out trade petering out. But can semis save the day?
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The Market
But did anything change in today’s market? Nope, sorry, not really.
The SOX rallied and made it four straight green days. It hasn’t gone to five straight since heading into the high in early June, so tomorrow is a test for semis. I would not be surprised to see them take a rest. I am basing that on the fact that my pick this time around, Intel, has reached that first target area I highlighted, and it has some resistance here.
Then there is the Dow. I realize no one cares about the Dow except me, but the gap up in early August saw the low of the day at 52,600. The last two trips down took it right to this 52,700 area, and today it closed at 52,721. Then there is an uptrend line that comes in here. So a break of this area might give us a little bit of panic. It would not be the same as if the IWM or S&P broke, but it would be worth noting.
The S&P isn’t that far from making a lower low (from last week’s low), but a retreat to that area would be a good test because the number of stocks making new lows on the NYSE came in around 100 today. Last week there were 181, so it would be good to see if we could get fewer new lows.
But you know what no one talks about anymore, especially today? Broadening out. If you are wondering why, then look no further than the S&P equal-weight or RSP. That is a lower low (than last week). It still sits right at its 50-day moving average, thus another chart to put on your radar. I continue to think the ‘others’ will lag the big-cap tech names.
Let me end by noting that the DSI for oil tagged 90 tonight. I thought energy stocks had had enough a week ago, but now I really think it!
New Ideas
I was asked about Broadcom (AVGO) since its earnings last week gapped it down but it has come right back. The stock has a lot of support in that mid 300s area. Maybe it needs more sideways action but if it comes back under 360 I suspect it holds.
Today’s Indicator
The 30-day moving average of the advance/decline line is still not fully oversold.
Q&A/Reader’s Feedback
I am a terrible chaser, therefore I cannot chase Nebius (NBIS) after it has rallied 20% in a few days. The worst I can say is it filled that August gap and has resistance overhead at 270.
I will say the same about Vertiv (VRT), regarding chasing only this chart is a bit different. The resistance at 300-310 comes from the downtrend line and a lot of trading in that area. If—a big if—it can map out as I have drawn in blue, then I would buy the pullback to the line.
Here again we have a stock in CoreWeave (CRWV) that has run 20% in three days so I am never going to think it’s okay to buy it. There is a decent amount of resistance in that 110 area.
Linde (LIN) needs to hold this area (460-ish) because if it breaks, it will leave behind a very big top. I do not like that it gapped down in late July and was unable to fill that gap on the rebound. The stock looks weak to me, but so often the selling dries up—and today is the third day of selling.
As an aside, note the AI/tech/semis have rallied for 3 days, and the ‘others’ like LIN have declined for 3 days. Either/Or.
I am so disappointed in Air Products (APD), which I recommended about a month or so ago. It cannot break out over that 315 area and is now in danger of returning to support. 285-290 is good support. If it gets down there gradually, it would be better than if it gets there quickly.
