QQQ Targets New Highs
RLT Newsletter
The Market Setup
Thursday delivered the follow through that Wednesday’s gap set up. QQQ pushed higher and closed up 1.16% on the day, decisively breaking out of the six day flag pattern it had been sitting in. SOXX and SMH showed strength midday but gave back much of those gains into the close.
QQQ Daily Chart
For this market to put together another strong leg higher, tech bulls need to show up in force and push into new all time highs. I think QQQ is headed there from here, and my first target is $$764. That level along with my higher targets of $770 and $800 are not out of reach if semis and the AI names can clear their resistance, hold it, and keep grinding higher.
Names like INTC, TSM, MU, LRCX, and SNDK have already closed back above their key resistance levels. Meanwhile several of the AI names, MRVL, ARM, AMD, STX, and AAOI, are still sitting just below theirs. If memory, semis, and the AI group as a whole can break out together, that’s a great sign for this bull market. If this breakout turns into a trap and we close back below those levels, I’d expect at the very least more chop.
AMAT gapped down on earnings Thursday evening, which could weigh on the space a bit. As long as the 100 day SMA holds, I still see it recovering and moving higher with the rest of the group.
SNDK Daily Chart
Cybersecurity Continues to Hack its Way Higher
In this market, gaps and relative strength matter. Cybersecurity has been one of the hottest groups around. CRWD, PANW, FTNT, NET, ZS, and S have all shown incredible strength over the past few months, even while most of tech was getting hammered.
I’m already long NET and watching several of the other names for a pullback or a breakout setup to get long, depending on how each one is shaping up. I took and featured a great trade on CRWD near its July lows and am fully out of that position now, but for anyone still holding, the next target is $243, the 1.618 extension from the last pullback.
CRWD Daily Chart
FTNT: Still Upside Despite Extension
For a name in cyberspace that still has a decent risk reward setup despite an enormous run over the past several months, I’m watching FTNT. It’s a solid fundamental story, and after its breakaway gap in May it went vertical. It pulled back 15% in July and has since formed a tight pennant inside its earnings candle. A break in either direction here could be tradable, but the trend and momentum are clearly with the bulls. With earnings out of the way, a breakout could push FTNT toward $187, then $200.
FTNT Daily Chart
The best