Douglas Busch

"Electric" Action:  This earnings season it is fair to say has seen its fair share of disappointments. At least in reactions, and that is really all that should matter to those who follow PRICE. Sure there will be some dislocations, but those will often be evident after the fact with a technical catalyst that lets one catch a falling knife with some risk/reward parameters. Leaders such as EBAY were slammed Thursday by 8% and this looks like a classic take the stairs up and the elevator down (the fact that this was lower 10 of the last 11 sessions coming into earnings did not matter). This has an RSI above 80 less than 2 months ago and today was nearly a teenager. SN is another example and this met its measured move to 114 from a bull flag breakout almost precisely and in one day is back to testing the move. Below is the daily chart of TSLA and it seems like a year ago the euphoria surrounding the earnings reaction on 10/24, screaming higher by 22%. It is down 7% this week heading into Friday and there is no reason to be a hero here. Wait until this can clear the ascending triangle of 270. It is now below the inverse head and shoulders pivot of 260 on the WEEKLY chart. 

Tech Proxy:  We all know the "creativity" of some of these major S&P sector ETFs with their stock selection. My favorite thus far is UBER being a transport name and a top 3 holding in the XLI (industrials) even though it is well known as a software play. Let's be honest, nearly every company is a technology play, becoming one, or losing ground. Continuing with our theme of looking at the mega caps during this fortified earnings week, today we take a look at AMZN. This one trades a bit wide and loose but is right at an infection point honing in on the very round 200 number and is presently right at a cup with handle pivot. If it can get above there will have to deal with bull flag break DOWN and the doji candle from 7/9. Notice on the MONTHLY chart it is now back above the cup base trigger of 188.31 and that breakout carries a measured move to 295. That, if it occurs, could happen in late 2025 or sometime in 2026. That bullish hammer candle in August shook many weak shareholders out. 

Same Old Story: For the last 5 months, not such a small sample size, software has outshined the semis. Perhaps that may change with a stellar AMD report Tuesday after the bell, but remember once trends get started they are more likely to resume than reverse. The WEEKLY chart below shows the powerful 3-week tight pattern with the last 3 weeks all CLOSING within just .62 of each other and that is after a double bottom breakout. There may be some pushback near the very round par number in the short term but this fund should power higher into year-end. There are things to like on the daily chart with the break above the bull flag aligning with the very round 90 number and it is for the moment brushing off the bearish gravestone doji candle from 10/25 and the spinning top and then the bearish engulfing candle on 10/14-15. On the MONTHLY chart, the bull flag breakout above 89 is still well intact and carries a measured move to 131.

Semi Step Child:  The red-headed stepchild in the semiconductor space to NVDA is AMD. Many may not think that is fair, but NVDA is trading just 2% off its most recent 52-week highs while AMD is 30% off its own annual peak. Notice here how the overlapping PRICE chart shows the divergence between the two greater than it has been in the last 6 months as the last 2 weeks their paths have bifurcated. It is not a reason to not warm up to AMD however, another mega-cap with earnings Tuesday after the CLOSE. Below is the daily chart and I admire the doji candle at the very round 150 number after its third double-digit drawdown since this summer. Notice after each drawdown it has made progress and it has made higher lows since the 35% July swoon. On the WEEKLY chart if the lows from that doji session hold up a double bottom base with a pivot of 187.38 is setting up. It is easy to spot the near-term tops on the WEEKLY chart too with the completion of the bearish evening star and engulfing patterns in March and July.