Software Sat Out:

  • Wednesday was all about the semiconductor space as the Nasdaq surged nearly 3%. The SMH advanced 7.6% while the IGV added a "measly" 1.4% in comparison (and more important perhaps was the SMH CLOSED at highs for the session while the IGV did just the opposite finishing just above its 50-day SMA but now is below its 85.30 double bottom breakout pivot from 6/27 (bulls will say that is an optimal entry point and it is still north of the bullish island reversal from the gap up on 6/12 following the gap down on 5/30). Could this be a sign that the tech party was not as broad as it should have been? Of course, a lot of that underperformance was due to MSFT putting up a dud after its earnings reaction. The daily chart of Mr. Softee below shows a possible double-bottom base developing as it now sits 11% off most recent 52-week highs, but in my opinion, the lows of 412 from Wednesday must hold. If not a move back to the very round 400 number may be in order where it traded for a good chunk of early 2024, and that would align with the 50 WEEK SMA to catch up in PRICE. Notice it is looking at a possible first 4-week losing streak since last summer.

AMD Faded:

  • One of the more eye-opening movements Wednesday, was the action in AMD after a very solid earnings announcement. It is a good example of PRICE being omnipotent as this has been a name that has been underachieving as it was swimming below the 200-day SMA "where nothing good seems to happen". Notice here it has been acting inferior against peers since the start of March. It did record a bearish filled-in black candlestick, however, those tend to act better near tops rather than bottoms. One positive is it may be finding support near the prior breakout on the WEEKLY chart above a 130.89 cup base pivot as it looks to record a possible spinning top candle which indicates selling pressure could be abating. It is now a whopping 36% off its most recent 52-week highs (peer NVDA is less than half of that even with its drawdown). The WEEKLY chart of NVDA looks much more constructive as it carves out a bullish hammer off the very round par number (notice how the bull flag measured move of 140 was achieved).

Recent Examples:

  • Trying to balance off the weak softness stance in this note perhaps there can be a bright spot with the daily chart below of IOT and how it appeared in our 7/23 Technology Note. This name was above the suggested 38.57 cup with handle pivot intraday on Wednesday but was unable to CLOSE above it. The name still trades 9% off most recent 52-week highs and its chart here can now also be interpreted as a bull flag that started with the spinning top candle on 6/17, and a break above there would carry a measured move to the very round 50 number. Its WEEKLY chart shows some good action against the IGV as it looks for its 6th advance in the last 7 and most impressive was the week ending 6/28 that jumped 15% quickly reclaiming the 50 WEEK SMA. Its MONTHLY chart recorded a bullish engulfing candle after June registered a bullish hammer and after the previous 8 months all CLOSED somewhat taut between the round 30-40 numbers. 

Special Situations:

Check Point Software:

  • Software play up 20% YTD and 39% over last one year period.
  • Name 2% off most recent 52-week highs and MONTHLY chart shows very strong action but it may be extended as it has not met the measured move to 190 from the break above the cup base pivot of 150. Give credit for long-term comeback as this was a software laggard between 2017-2022 as seen on ratio chart.
  • Earnings reactions mixed up 5.9 and 1% on 7/24 and 2/6 and fell 5 and 1.8% on 4/25 and 10/30/23.
  • Enter short after succession of topping candles.
  • Entry CHKP 185.  Buy stop 188.

Veeva Systems:

  • Software play UNCH YTD and lower 6% over last one year period.
  • Name 19% off most recent 52-week highs and notice on MONTHLY chart it has been below the 200 MONTH SMA for nearly 2 years, and the line is sloping lower saying long-term trend very soft. Big distribution as well on drawdowns along the way.
  • Earnings reactions mostly lower down 10.3, 1.5 and 3% on 5/31, 3/1, and 12/7/23 after a gain of 8.4% on 8/31/23.
  • Enter short after bearish engulfing candle and upside gap fill.
  • Entry VEEV 193.50.  Buy stop 203.

SS & C Technologies:

  • Software play up 19% YTD and 25% over last one year period. Dividend yield of 1.3%.
  • Name 1% off most recent 52-week highs and MONTHLY chart shows best move since April 2020 and prior 3 months all CLOSED very taut with a 61 or 62 handle and we know breakouts from that type of digestion tend to be very powerful. Good looking cup base shaping up.
  • Earnings reactions mixed up 6.3 and 4.8% on 7/26 and 2/14 and lower by .1 and 1.5% on 4/26 and 10/27/23.
  • Enter short after spinning top/bearish evening star completion.
  • Entry SSNC 73.50.  Buy stop 75.25.

Good luck.

Entry summaries:

Short after succession of topping candles CHKP 185.  Buy stop 188.

Short after bearish engulfing candle and upside gap fill VEEV 193.50.  Buy stop 203.

Short after spinning top/bearish evening star completion SSNC 73.50.  Buy stop 75.25.

 

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Software Sat Out:

  • Wednesday was all about the semiconductor space as the Nasdaq surged nearly 3%. The SMH advanced 7.6% while the IGV added a "measly" 1.4% in comparison (and more important perhaps was the SMH CLOSED at highs for the session while the IGV did just the opposite finishing just above its 50-day SMA but now is below its 85.30 double bottom breakout pivot from 6/27 (bulls will say that is an optimal entry point and it is still north of the bullish island reversal from the gap up on 6/12 following the gap down on 5/30). Could this be a sign that the tech party was not as broad as it should have been? Of course, a lot of that underperformance was due to MSFT putting up a dud after its earnings reaction. The daily chart of Mr. Softee below shows a possible double-bottom base developing as it now sits 11% off most recent 52-week highs, but in my opinion, the lows of 412 from Wednesday must hold. If not a move back to the very round 400 number may be in order where it traded for a good chunk of early 2024, and that would align with the 50 WEEK SMA to catch up in PRICE. Notice it is looking at a possible first 4-week losing streak since last summer.

AMD Faded:

  • One of the more eye-opening movements Wednesday, was the action in AMD after a very solid earnings announcement. It is a good example of PRICE being omnipotent as this has been a name that has been underachieving as it was swimming below the 200-day SMA "where nothing good seems to happen". Notice here it has been acting inferior against peers since the start of March. It did record a bearish filled-in black candlestick, however, those tend to act better near tops rather than bottoms. One positive is it may be finding support near the prior breakout on the WEEKLY chart above a 130.89 cup base pivot as it looks to record a possible spinning top candle which indicates selling pressure could be abating. It is now a whopping 36% off its most recent 52-week highs (peer NVDA is less than half of that even with its drawdown). The WEEKLY chart of NVDA looks much more constructive as it carves out a bullish hammer off the very round par number (notice how the bull flag measured move of 140 was achieved).

Recent Examples:

  • Trying to balance off the weak softness stance in this note perhaps there can be a bright spot with the daily chart below of IOT and how it appeared in our 7/23 Technology Note. This name was above the suggested 38.57 cup with handle pivot intraday on Wednesday but was unable to CLOSE above it. The name still trades 9% off most recent 52-week highs and its chart here can now also be interpreted as a bull flag that started with the spinning top candle on 6/17, and a break above there would carry a measured move to the very round 50 number. Its WEEKLY chart shows some good action against the IGV as it looks for its 6th advance in the last 7 and most impressive was the week ending 6/28 that jumped 15% quickly reclaiming the 50 WEEK SMA. Its MONTHLY chart recorded a bullish engulfing candle after June registered a bullish hammer and after the previous 8 months all CLOSED somewhat taut between the round 30-40 numbers. 

Special Situations:

Check Point Software:

  • Software play up 20% YTD and 39% over last one year period.
  • Name 2% off most recent 52-week highs and MONTHLY chart shows very strong action but it may be extended as it has not met the measured move to 190 from the break above the cup base pivot of 150. Give credit for long-term comeback as this was a software laggard between 2017-2022 as seen on ratio chart.
  • Earnings reactions mixed up 5.9 and 1% on 7/24 and 2/6 and fell 5 and 1.8% on 4/25 and 10/30/23.
  • Enter short after succession of topping candles.
  • Entry CHKP 185.  Buy stop 188.

Veeva Systems:

  • Software play UNCH YTD and lower 6% over last one year period.
  • Name 19% off most recent 52-week highs and notice on MONTHLY chart it has been below the 200 MONTH SMA for nearly 2 years, and the line is sloping lower saying long-term trend very soft. Big distribution as well on drawdowns along the way.
  • Earnings reactions mostly lower down 10.3, 1.5 and 3% on 5/31, 3/1, and 12/7/23 after a gain of 8.4% on 8/31/23.
  • Enter short after bearish engulfing candle and upside gap fill.
  • Entry VEEV 193.50.  Buy stop 203.

SS & C Technologies:

  • Software play up 19% YTD and 25% over last one year period. Dividend yield of 1.3%.
  • Name 1% off most recent 52-week highs and MONTHLY chart shows best move since April 2020 and prior 3 months all CLOSED very taut with a 61 or 62 handle and we know breakouts from that type of digestion tend to be very powerful. Good looking cup base shaping up.
  • Earnings reactions mixed up 6.3 and 4.8% on 7/26 and 2/14 and lower by .1 and 1.5% on 4/26 and 10/27/23.
  • Enter short after spinning top/bearish evening star completion.
  • Entry SSNC 73.50.  Buy stop 75.25.

Good luck.

Entry summaries:

Short after succession of topping candles CHKP 185.  Buy stop 188.

Short after bearish engulfing candle and upside gap fill VEEV 193.50.  Buy stop 203.

Short after spinning top/bearish evening star completion SSNC 73.50.  Buy stop 75.25.