Much of tech continued its strength into the weekend with solid closes on Friday. QQQ pushed slightly higher, and the path of least resistance still looks like it is up into the $729 gap fill.
QQQ Daily Chart
We saw NVDA scorch higher on Friday, only to run into some selling later in the day, leaving an inverted hammer near the highs. After such a strong move, I could see some consolidation on NVDA before another continuation higher. As long as NVDA and the big hitters in AI continue to hold up, I see no reason to start getting bearish on this market.
Having the Trillion Dollar Titans and the AI trade push higher for another leg is really all this market has been missing to break out into the next leg higher.
Google
GOOGL, the next key AI name, is sitting right on its 200-day SMA.
The risk/reward is really good here because if GOOGL starts taking out that 200-day SMA, it is going to spell trouble for the stock. That would put a push down into the $315 area back into play.
This name has been extremely choppy, and I think one of the better ways to play GOOGL right now is with a longer-term time horizon. Slowly adding on weakness and waiting for a more substantial edge to show up makes more sense to me than trying to swing trade every move.
The one swing trade I do see is buying off the 200-day SMA with a stop, or a hedge, just below it. However, we have tested the 200-day SMA quite a bit lately, so this is not nearly as high-probability of a trade as it was on the first couple of tests.
GOOGL Daily Chart
Apple
AAPL is not a key piece of the AI trade right now, but it is absolutely a key piece of the market.
It hit the key overhead gap and reversed hard. I no longer have a position in AAPL since it hit all of my targets, but if it can hold above $310, it should not have much of a drag on the market. We could easily see QQQ continue higher without AAPL leading the way.
AAPL Daily Chart
Microsoft
MSFT does look like it has some pulling back to do.
It has shown great relative strength throughout August and recently made a new relative high. However, there is a large gap below at $670 that I think will eventually fill. It is just a matter of when.
If MSFT drops down to that level in a choppy, overlapping, consolidating pattern, I think the area from $670 down toward the 100-week SMA becomes a pretty attractive level for anyone looking to gain longer-term exposure.
I am going to hold off on this name for now because it just made such a massive move higher, and the market is still quite wary of Microsoft’s massive capital expenditure spending.
MSFT Daily Chart
Amazon
AMZN looks really solid, which is good because it is a name I have been focusing on quite a bit over the past few weeks.
It is bouncing off a major support area that includes the double-bottom neckline, the 100-day SMA, and the 50% gap fill from the earnings gap.
I think this name is pretty easy to risk manage here. A close below $250 would mean we are breaking below a lot of the levels that should hold.
If that happens, I think the earnings gap is going to fill. That gap will likely fill eventually anyway. The question is whether AMZN can make new highs first.
AMZN Daily Chart
Micron
Now to the names that really moved on Friday, starting with MU.
The AI names had some really constructive pushes on Friday, and MU was one of the standouts.
MU gapped above the $969 level and ran all day closing just above its $1,000 resistance. The gap above at $1,124 could fill this week if the AI trade really starts moving again. If it closes below Friday’s candle this week, it would be another potential trap, similar to what we saw on August 17 with MU.
I love the volume coming into MU. I love Friday’s gap and the overhead gap, and I really like the fact that we are seeing money rotate back into this sector.
MU Daily Chart
Taiwan Semiconductor & The AI Stack
TSM also looked great on Friday as it finally closed above the AVWAP from the highs and held the 100-day SMA with a hammer.
AMD also closed back above the 100-day SMA with an increase in volume, making it another name that is relatively easy to risk manage. As long as AMD holds the 100-day SMA and the recent pivot, I am staying bullish.
Everything in my AI watchlist and portfolio, including INTC, MRVL, ASML, STX, and AAOI, looked solid on Friday.
But nothing looked better to me than SNDK.
AMD Daily Chart
Sandisk
SNDK has been one of the names I have been posting about in the RLT Swing Trading chat as I continued to add on the 100-day SMA.
It has held up extremely well since its August 13 breakout, especially compared to most of the AI stack.
I love seeing relative strength, and on Friday we finally got the payoff. If you are not already in SNDK, I am looking to add into a retest of Friday’s candle and keep the stop below the 100-day SMA.
Even if SNDK makes a lower high from here, it could still easily have 20% upside from Friday’s close. That is the kind of risk/reward and relative strength in a strong them that I want to see.
SNDK Daily Chart
One Interesting Seasonal Stat
One very interesting fact I saw on X over the weekend is that every single trading day after Labor Day has closed red for the past nine years. That is a pretty wild statistic.
If that pattern repeats this year, it could actually give us some good retests of Friday’s price action, assuming the market continues higher into the rest of September and bucks the normal seasonal weakness.
If the bulls can push through that seasonality and take the market to new all-time highs, it would be another sign of just how strong this market really is.
The Big Picture
Overall, I think the market’s resilience in the face of overwhelming uncertainty is even more reason to assume this bull market can keep ripping.
I have all of my levels lined out where I will risk mitigate, and we are right on top of a lot of them. I actually like that scenario even more because it means the risk/reward is really solid at this stage.
There is absolutely a chance we get a big breakdown and some stop-outs. But there is also a very real chance that the bulls take back control and push this market higher. If that happens, I stand to make much more than I stand to lose, and that is exactly where I like to be.
I do not need to know which scenario happens ahead of time. I just need to know where I am wrong, where I want to buy, and where the risk/reward makes sense on high-probability setups.
Right now, the levels are clear, the AI trade is finally showing signs of life again, and the bulls are still in control, even if just by a little.