Stock Trends

Big tech bounces back as Nvidia breaks out

Good morning,

The most important single-stock story this week is obvious: Nvidia.

After 6 months of sideways action and tons of anticipation, the stock broke out in a huge way on Monday. As the chart will show, the breakout measures to $600, or about 12% more upside from Wednesday’s close. But perhaps more importantly, the whole space continues to act incredibly well. This is a big reason why I cautioned against underweighting growth, even if value stocks have been leading.

This week, we’ll look at tech stocks bouncing back from support as well as:

• Financial setups going into earnings

• Stocks on the Blue Chip Hot List

• 52-week highs in healthcare

• High flyers responding after corrections

• and more!

*Please note, all commentary is based on and includes yesterday’s action, but due to data delays, all charts are through the January 9 close.

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Big tech bounces back

Nvidia’s breakout measures to $600

$500-$400= $100 of upside. Certainly not looking like a false breakout either, with the stock higher each day after Monday’s powerful 6.4% breakout.

Apple bounces at support, still not a leader

Apple bounced at support I called out in the MMP, but it’s hard to have conviction this is more than just a bounce. I’m not saying Apple is going to go down in absolute terms, but I would be inclined to fade this rally to rotate into better opportunities. Gap resistance at $191.

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But it’s not just Nvidia

LRCX: Lam Research

Big base Lam Research broke out, pulled back to support and is moving higher. Long-term base potential intact.

QCOM: Qualcomm

QCOM is a long way from all-time highs but the stock has formed a solid bottom over the past year and now broken out. Last Thursday’s low of $134 would be an appropriate stop for new money.

AMD: Advanced Micro Devices

AMD has been highly volatile but bounced off its summer highs and is making 52-week relative highs. $132 is key support.

MPWR: Monolithic Power Systems

Featured big tech base MPWR has broken out and bounced off previous resistance. Next step will be reclaiming $610 (the double-top breakdown point) but the long-term target remains $829.

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Financials setups going into earnings