Douglas Busch

Semiconductor Hiccup: Just as one was complimenting the reemergence of the semiconductors they recently hit another roadblock at the 200-day SMA, its 4th since the start of 2025. The daily chart below of the SOXX shows it on a current 7-session losing streak and Friday did bounce precisely off the very round 200 number for a mild 1% bounce. But is more pain to come? Its MONTHLY chart needs to distance itself from the 50 MONTH SMA here as last 3 times it touched the secular line it used it as a springboard (notice how the semis overall softness for the last one year can be seen by the decade long break below the uptrend against the Nasdaq). Of course, NVDA REPORTS this week Wednesday after the CLOSE, and it is the second-largest holding in the fund. It is right back to the level of its last release on 2/27 which slumped 8.5%. I do not have a firm conviction on the name heading into the report but the doji candle last Tuesday is something to be aware of (notice the two dojis on 4/16 and 4/22 correctly called a strong upcoming move). For the bull take on NVDA the MONTHLY RSI shows the last 2 times it undercut the overbought 70 RSI number it held firm, unlike the prior 2 that traveled to the 40 area in 2018 and 2022. Top-component AVGO is sporting a bull flag and continues to outshine NVDA, and a break above a 232 pivot carries a measured move to the very round 300 number. It was UNCH on the week with NVDA down 3% and the SOXX by 5%. 

Tech Confident:  The Nasdaq continues to ride a wave of optimism and after a 4000 handle plus run since early April, it feels like the move still has legs. Below we can see the daily chart and one has to admire the consolidation over the last several sessions, and this is in the teeth of some dubious candlesticks. Bears must be exasperated with Tuesday recording a doji candle (bearish harami cross) which often is adept at signaling changes in the prevailing direction. Add to that the bearish hanging man last Friday and the index just shrugging these off is speaking volumes. The recent action can be interpreted as a bull flag or a handle on its double bottom base, but this should feel inclined to go on and test the very round 20000 number. If and when it gets there the burden of proof would shift to the bulls as this may not be just a wall of resistance but a mountain. On the WEEKLY chart this will be a retest of the break BELOW the bull flag there and notice for 12 weeks the bulls were unable to break the tech benchmark to the upside. I still feel there is still plenty of negative sentiment and a move above there could carry a measured move to 24000 from the bull flag breakout. Heading into Friday the Nasdaq WEEKLY chart has the look of an inside spinning top candle the week ending 5/9. Once again it negated that with a 7% gain last week. The quadriceps may still have plenty of stamina.

Leaders Speak: Back when markets were struggling and there was not a breakout to be found we started leaning bullish. Overall we frequently like to say there is no reason to catch a falling knife until a technical catalyst presents itself. On the Nasdaq, there was no reason to get involved until good risk/reward showed up with the bullish counterattack candle on 4/7 (notice the doji candle Tuesday). One of the first to record a breakout was the daily chart below of PLTR, and we also like to mention that not only do the best breakouts work right away but they offer add-on buy points on the way UP. We originally looked at PLTR in our 4/11 Tech Note, then CRWD in our 4/16 Technology Note and then NFLX in our 4/23 Technology Note and breakouts started to expand solidifying the bullish theme. Nothing goes up in a straight line and CRWD is now offering an add-on above a 450 bull flag pivot which would carry a measured move to 540. NFLX ran 200 handles from its double-bottom breakout. These were among the first to breakout, and they should be watched with an eagle eye. If these start to disintegrate that would be a big red flag. For PLTR that means holding the 118 area going forward.

China Treading Water:   There was a time not too long ago were incessant chatter about how domestic markets were being strongly overshadowed by international. That has quieted down dramatically and the daily chart below of the KWEB shows how for 2 months it has been a tough go of it against US internet players (via the FDN). Ratio charts compare action on a relative basis remember and does not mean that the 2 instruments being looked at can not act robust absolutely speaking. If the KWEB can stabilize here just above the 50-day SMA good things may begin to happen. A bullish golden cross is plausible with the 21-day EMA potentially moving above the 50-day SMA and notice the last time that occurred in January it set off a nice thrust upward. Among the top 10 holdings my favorite set up in NTES which registered the best earnings reaction jumping 15% on 5/15 and now rests just 2% off most recent 52-week highs. It is now well extended above a 106.77 double bottom breakout and look for some digestion here. A break above a possible bull flag pivot of 122.50 carries a measured move to 140. Here one can see how this has been dominant against peers BABA, JD, and PDD since the market rally lows of 4/7. Leaders show their true colors during times of stress. Pay attention.

Stalling or Resting? Has the robust move from the early August lows near 15000 to the current peak at the very round 19000 number a bit too much too soon? The daily chart of the Nasdaq shows that path and I believe it will go on to retest that former peak right above the 20000 figure. Its WEEKLY chart shows May recording the first bullish MACD crossover since last October, which was from well above the zero line, unlike this one. The move BELOW the bull flag in Q1 exacerbated the big 25% drawdown, as we know from FALSE moves come fast one in the opposite direction. It is now above the 50 WEEK SMA, and not only did the very rare WEEKLY gap from last week hold (first in 2.5 years) but it rose more than 7% and CLOSED at highs for the WEEKLY range. A cup base could be taking shape, and when and if it touches 20000 again and a break above that area could see a measured move toward 25000, perhaps sometime in 2026. META has not been spoken about much since its 20-day win streak earlier in 2025 has carved out a handle on its double-bottom base with an add-on trigger of 662.77. Are the big mega-cap techs ready to assume leadership?