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HACK Attack: There has been a bifurcation in action among the cybersecurity stocks after REPORTING earnings this quarter. Many have disappointed, or at least recorded weak reactions, including one of my favorites in FTNT. On 5/8 the leader gapped down to the tune of 8% and since it has been having issues with the upside gap fill from 5/7 session. On the positive side it has formed a bull flag and a break above 106 could carry a measured move to 119. OKTA was shelled Wednesday by 16% after an ill received number, but should settle in here as it has filled in a gap from 4/28. PANW dropped 7% on 5/21 and there is nothing to do here until it can CLOSE above a double bottom with handle trigger of 195.52. Best in breed CRWD, all four of these names are all top 10 components, REPORTS next Tuesday after the CLOSE and its last 2 reactions fell by 6 and 5% respectively. This has broken above the 450 bull flag trigger would could see a measured move to 540. Interesting that two top ten holdings in the ETF are actual defense names, many think pure play software, and the MONTHLY chart on NOC is carving out a cup base pivot of 534.16 in a base dating back to Q4 '22. Respect the comfort being given at the 50 MONTH SMA here which also occurred in 2019-2021. GD needs a CLOSE above 283 on the WEEKLY to start rounding out the right side of a potential cup base. 

"Juicing" Up the Fund: Looking at the top holdings in the XLI the selection committee certainly became very creative adding UBER to the fund back in 2019. It is the second-largest holding in the ETF at more than 4% and its recent run has helped the benchmark handsomely. The stock is up 48% YTD and the MONTHLY chart below shows it looking for a cup base breakout in May if it can finish above 82.24 this Friday. The potential breakout to 110 which quite frankly the way it is going could happen in late 2025. Its daily chart is well extended above the double bottom trigger of 77.68 and Monday ended a 4-session losing streak, its first since the last 4 days of 2024. The streak began with a bearish counterattack candle on 5/20 just above the very round 90 number, but remember the vast majority of stocks that trade through the very round 90 number often go on to trade to par and beyond. The XLI has a solid 1-2 punch with top component GE at 5% and I am still in awe of its MONTHLY chart which has nearly met its measured move to 257 from its cup base breakout above a 142.11 pivot in a pattern 8 years in duration. Since October 2022 it has declined just 7 months and back-to-back times just once. 

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.