Markets and individual stocks swung wildly around Jerome Powell’s discussion yesterday, resolving higher before gapping down and selling off to close at lows today. Futures are green tonight.

No doubt it has been tough to get increasingly invested as the indexes are taking a break after being extended into overhead resistance, and volatility is still bucking around pivot points in stocks. Some quality names are showing signs of danger (PERI, AXON, AEHR), but most leaders are holding up quite well. The best thing to do here is to continue to watch the leaders for clear signals and let your portfolio tell you if and where you should increase exposure.

I am still looking to add as long as the trend remains up, though I am not yet seeing low-risk setups proliferate in the leading names, nor am I seeing a ton of success in my portfolio yet. A bit more time is likely needed. Until then, I will continue to hawk the leaders for entry points or destructive changes. Updates on them below. Let’s get into it!

Index Update

The Nasdaq remains above the rising 10MA and 21EMA with net highs/lows up, though the number of net highs has tapered off a bit as you can see in the chart. As long as this index holds above the moving averages, it’s positive, and the 200-MA should start rising in 2-3 weeks if price remains above it.

The Nasdaq continues to consolidate above the 10-day moving average after hitting resistance last week. It looks to be forming a short bull-flag pattern and volume is decreasing through the base. I’m watching for the moving averages to catch up to price further and for support levels to hold. This index has led vs. the S&P-500 since early January.

The S&P-500 has held the key 4100 level as support in this week’s trading. Watch for this to continue to act as support, and if not, then the 21EMA just below it.

Stock Updates

Arhaus (ARHS) held stops today on a shakeout below the 10-day MA, though I don’t particularly love the wedging action into the breakout point and 8% range today. Watching for a move through $15 on heavy volume to add, but might look to sell into strength if it’s not a compelling move.

Credo Technology (CRDO) is acting super near all-time highs even though sell volume picked up a bit today. It’s still holding the $18 all-time high breakout point, very constructive given the pullback in the indexes. Stops around $17.30.

Mobileye Global (MBLY) is still up over 15% from the breakout buy point and is now consolidating on decreased volume. A few more days of tightening up would be ideal to set up a better spot to add, but through today’s high on heavy volume could work if the bulls push it.

Lattice Semiconductor (LSCC) came back down to test the pivot and bounced off with “tennis-ball” action. Move stops up to $78. Earnings 2/13, so I’m holding off on adding before then, and will sell if there’s not enough of a cushion to hold through earnings.

Amkor Technology (AMKR) is still in the base, but relative strength is declining. Earnings are 2/13 which might be the catalyst it needs to push to new highs.

Best Setups

The setups below are ideas, not outright buys; placing a trade depends on the price action, volume, and general market. To succeed, you’ll need to make the trade your own based on your rules for entering and taking profits, and always use a stop-loss!

Axcelis Technologies (ACLS) reported a big earnings and revenue beat this afternoon, but mixed Q1 guidance with EPS slightly below expectations and revenue above estimates. It’s down just 1% after-hours, so I’m watching the reaction tomorrow for a high-volume move to new highs at $121.

NVIDIA (NVDA) is a semiconductor with AI tendrils, continuing to show big relative strength despite being in a worse technical position relative to highs. It didn’t want to test the $194 inverse head and shoulders breakout area, instead continuing higher. That’s strength. Watching for a better buy point to set up to start a position.

Aehr Test Systems (AEHR) quickly traded above the $37 breakout point yesterday, but volume on the day was just average, and it closed below highs with the index volatility. Last night it announced a Secondary Offering which caused a selloff today. It bounced off the 21EMA, so no real damage has been done. Watching for now.

Life Time Group (LTH) showed profitability for the first time, kicking off a 58% move after earnings a few weeks ago. Now it’s consolidating on declining volume with three inside-days in the last four sessions. I’d consider a high-volume breakout through $19.80 with stops at $19.

Tesla (TSLA) is still below the declining 200-day moving average, but it is undeniably strong, up nearly 100% in the past four weeks on incredible volume. The company has AI talent/ambitions and that might be underrated in the stock. I’d prefer to start a position on a pullback to the 10 or 21-day moving averages as it’s a bit extended here.

That’s all for tonight! If you have any feedback or questions, just reply to this email or hit me up on Twitter.

See you back here on Sunday night for an update on our stocks.

Cheers,

Dan Dormody