Tech Rally In Jeopardy? Key Chart Levels To Watch Now

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Hello everybody. Welcome to Trading the
Close. My name is Drew Dosik and guys,
welcome back to the markets. Hopefully
you all had a fantastic Father's Day
weekend. We had a little bit of
divergence today in the market. SMH
accomplished brand new all-time highs,
but the Qs and the Spiders did pull down
ever so slightly. And namely because
we've got some good inflation data
that's going to be posting this week on
Thursday morning. We're going to have
core PCE data that's posted. If you guys
recall most recently, we had a lot of
hot inflation data. So, I imagine this
week could be one of those weeks that
investors will start trimming some of
their positions getting ready for that
hot inflated inflation data that could
potentially be rolling out on Thursday.
Plus, we've got Micron earnings
Wednesday after the bell. So, this is
going to be a pretty big heavy loaded
week. Even though we don't have FOMC, we
don't have options expiration, and we
don't have a boatload of earnings, but
both of those events are likely to move
the market just simply cuz MU is so big
right now pushing memory up on the
charts. Let's get into some charts, by
the way. First off, with the S&P 500, we
see here the Spiders down 0.31% today.
Namely though, because of what occurred
right here at the 10:10 candle. You can
see here this is the opening of the
morning session. We gapped up over last
Thursday's close, continued pushing
higher, then put in some bullish
consolidation with these 10-minute
candles developing large wicks implying
we were about to start ripping to go
higher. And then at 10:10, the selling
pressure commenced and look at what
happened. We had a downward slide and
then sideways consolidation throughout
the remainder of the day. It just if
you're gauging today's price action,
that is not part sort a bullish rally in
a continuation move. However, that
doesn't really change the narrative on
the daily candles. As you see here, both
Thursday as well as today all had price
action contained within Wednesday's
large red candle. So, we didn't get
above it, nor did we start falling
beneath it. So, those are the two things
really to monitor in the days ahead.
Watch for the high of 752 and 15 cents
to get breached on the upside, then we
can get out of this near-term downward
push. And then if we do have any sort of
acceleration momentum pushing us
downward, this is the key trend line to
watch. I highlighted this last week,
too. This does uh connect from a pivot
low on May 19th, connected over to this
large red candle that occurred here on
June 5th. That low, and that area
basically distinguishes whether the uh
price action in the S&P 500 near-term
can start continuing going up or
breaking down, which in which case it
would find support on the top of this
parallel channel at 728 and 65 cents.
Next up into the Nasdaq Composite,
similar situation as the Qs as far as
the near-term trajectory, except for you
could see here on Thursday we were
closing right here at the top end range
of Wednesday's candle, and then we just
reversed course closing underneath that.
So, near-term for tech, it's nothing's
too much changed, but as far as extreme
near-term closing underneath Thursday's
candle was not uh any help to push the
Nasdaq up higher on the charts. We'll
see how this consolidation pattern
develops over the coming days. Uh be
watching the high and lows of this first
candle, though, for insights as to
either a break lower or a break higher.
The The low on this candle is at 25,960,
and the high is at 26,511.
And I want to bring up the Qs just real
quickly, cuz if you guys recall on this
chart, I had a very narrow inclining
parallel channel from the liberation day
lows. And notice what's happening the
last four or five trading days. We've
attempted to get back in this parallel
and have since failed. You can see we
closed in, closed out, closed out,
closed in, then closed out again. So,
really this is the battle that's going
on with the QQQ. So, for tomorrow for
the bulls, they want to see price get
above $742.24
and close back within that parallel.
Otherwise, we're just simply batter
battling re-entry at this point here on
the chart. Next up into the SMH, as I've
said, another brand new all-time high.
But, look what occurred here on this SMH
daily chart. We put in a hanging man
candle up here at the top of the chart.
Now, we did that again back here on June
3rd, and then look what happened after
that hanging man candle was printed. We
ended up declining on the SMH just about
13% to the lows that you see here on
June 9th. So, will that happen again?
Uncertain. One thing for is for sure
with this close, the bulls accomplished
a major feat extending themselves
further away from this inclining trend
line. That's the make-or-break point on
this chart for the SMH right now, this
yellow inclining trend line. Now, for
tomorrow, if we get anywhere close to
testing it, that's at $639.90.
Let me remind you folks, we are all the
way up now from the liberation day lows.
We are now up 294%
with today's push. Incredible push
considering the other times we breached
230%,
we declined in between 30%
down on the charts. SMH said, "Not this
time. We're just rocking up getting ever
so close to that 300% push from those
April lows." Really incredible on that
chart. Uh next up into the 10-year
yield, actually elevated a little bit
today. And you could see here, we got
about an hour left of the 10-year uh
price action before it closes and moves
into tomorrow. But, notice what's
happening. We're now trading above the
consolidation range that we have been
within the previous 5 days. This is
actually a big development. Now, yes, we
could still remain bearish inside of
this big red candle as long as we don't
breach it to the upside, but we have
certainly changed two things. One, we
putting in a daily close above this
horizontal trend line at 4.484%
and secondly, we're getting above the
high pivots from these consolidation
candles. You can see from this one here
on June 12th
that we are actually above. The high on
June 12th was 4.505 and we're currently
now at 4.509.
Put in a daily close above this candle
from June 12th, that increases
probabilities of us going up and
attacking the next resistance at 4.555.
This does illustrate, as I pointed out
at the beginning of the show, inflation
is going to be front and center,
especially right now in between earnings
and we have a new Fed president and the
Fred Fed leader and they're likely
interested in hiking rates, guys. Last
week we talked about that, how that
transition from a December rate hike
into October. We'll see what this week's
PCE data, that core PCE data gives us,
but we can already see the 10-year yield
pushing up. I'm anticipating another
potential hot print that could push the
10-year yield higher and then that could
put pressure on equities. Could be, as I
said, some of the reason why we saw
profit taking come into the markets and
the S&P 500 and the QQQ right at 10:10
this morning. Uh next up on gold, you
can see here I've got a different
parallel on gold. I developed this from
this low here on the liberation day
lows. You can see most recently on our
low pivots on gold, we are testing to
breach the bottom range of this
parallel. Now, today we also did put in
another down day, recovered decently
from the lows though. However, I want
you to be monitoring this level in the
coming days. It's right at $4,106
and if we get any sort of closes
underneath that parallel, be watching
for price to accelerate a little bit
lower, just under $4,000 we'll have
support for a potential re-attack of the
bottom of this parallel channel. Near
term though, we've got declining trend
lines capping off any sort of bounces on
gold. Should we catch a rally in the
coming days, we can be anticipating
resistance on gold $4,361.
Uh next up into silver, down just a
little bit more than gold, almost 1%
down today. You can see this curling
over right now, catching a little bit of
support just from these two trading
days. If the selling continues, next
support at 6102.
But guys, I'm still and I've told you
this before, I'm waiting for price to
get down sub under this 50%
range, which is around $58 down to 50,
and I would be a buyer of physical
silver. Still need that to play out in a
little bit uh more uh with more downside
pressure, potentially with rates going
higher as what we've anticipated coming
with these new rate hikes. Uh next up
into oil. You can see here, US oil
really had two different stories of the
day. Basically, what we need to take
from today is where price action is
closing. There's no doubt about it.
There's definitely a deal going on in
the Middle East. However, it could be on
fragile ground, and over the weekend,
you can see here, price did gap up. As
we see here on Sunday night, we did have
higher prices in oil, but it then
quickly uh uh diminished all those
concerns, and price just continued to
push down further on the chart. Now,
this is the 1-hour time frame. Notice
how price just got stuck here at $75.56,
highlighting the fact that this area
still is support. Even though price is
under it right now, we'll see if this
ends up breaking, but this level of
support has been in play today. Next
level of support is going to be down
here at the bottom uh of this declining
trend line, right at $69.57.
Still, oil is due for a technical
bounce, guys. You could see this on the
daily RSI now under 30. It's now reading
29.25.
Even with today's bounce, that didn't
give us that technical relief the RSI
would be needing to get back closer into
this 50 range. Uh next up into Nat Gas,
guys. Nat Gas accomplished two things
today. We've been talking about how well
Nat Gas has been saving itself from
breakdown on this inclining trend line.
And then also, if it were to get back
above that inclining trend line, it
could start building bullish momentum in
this wedge to break back within the
parallel channel. Well, it did two
things as I said. It tested that
parallel channel, got rejected from
them, and then got rejected from this
inclining trend line as we see price
closing underneath it today. Now, this
is just one candle, much like we had
last week. One candle closing
underneath, we didn't get any sort of
close underneath Friday's candle as you
see here. So, we need to have price
action come down further to get any
confirming break. Until then, we can
kick the can into tomorrow and see
resistance clearly right here on this
parallel $3.35,
and entry actually into that area of the
wedge is at $3.30. Something the bulls
want to see accomplish more so than
anything. They want to see price get
back above that inclining trend line. Uh
next up into Bitcoin, guys. Bitcoin
actually had a decent day today, up
1.78%
navigating the bottom of this parallel
channel, and you can see Bitcoin has
done that literally for several weeks
now. Remind you on the weekly time
frame, if we do get a confirming close
under this parallel as we see price is
doing its best to maintain within it,
then this head and shoulders pattern uh
measured move target gets closer and
closer. As you can see here, that's
still in check at 37,508.
I'd likely be picking up some more
Bitcoin once and if we get under $50,000
and buy all the way down here to that
head and shoulders target. All right,
guys, into some stocks really making
some whiplash moves today. Look at
Netflix, guys. So far for the week, only
first day of the week, it's down 5.82%,
but look what it's running right into.
Now, Netflix, too, guys, look most
recently from April, this has been a
steep decline, nearly straight down on
the charts, over 30% down without any
sort of positive relief rally in that
drop, straight down. I love these sorts
of moves because they generally produce
the very sharpest moves to the upside.
Look no further than back here on the
same chart. Look what happened when
price declined here in Netflix and
finally caught support. Look at that
push. And we're likely due for a
significant bounce. Now, the one great
thing about parallels uh and this
declining trend line is that you can
start inching into a position here for
that technical bounce up to the first
resistance level at 86.92.
And if you get a daily close underneath
the parallel channel with a confirming
move, just stop out. So, you have very
little risk in a potential high reward
setup for something like this of a big
stock like Netflix catching a bounce on
technical grounding. Now, we see here
I've got another support level under the
parallel. So, should we break and
confirm underneath the parallel, be
watching support at 67.30 to then
re-attack the bottom of the parallel.
Uncertain if it will regain entry at
that point. However, that's at least the
playbook for near-term, so you can
capitalize at least on some small-term
bounces if Netflix does break this
incredible long-term inclining parallel
channel that you see here. Just to date
it back, guys, price action over here
was in this parallel channel back in
November of 2021. So, that's a stout,
almost 5-year inclining parallel in
which price briefly breached the top,
but then quickly got rejected. Notice
the consolidation that got rejected,
pushing us down to the bottom. So, we
may just replicate a similar situation
like this of a of a false breakout and
have a false breakdown here to the
bottom with price trying to re-attack
the bottom of the parallel. This is very
interesting, something that I would be
very
keen on picking up some just to dip my
toe in the water for a pure technical
bounce play on that chart.
Next up, stock moving in the opposite
direction today. Look at this pop on
SMCI, closing the day up over 15% but
notice where price closed, guys. Right
here on the 50% area of this parallel
channel. Now, let's zoom back out
further so you can see this parallel
that started back here in July of 2025.
We had some price action deviate from
the bottom on several occasions. Notice
how many times it took to fight to get
back in also just break down again and
then put in consolidation to break back
within. So, now near term, you can see
the sharp decline on SMCI. That came
from their big $7 billion offering the
other week. Now, it looks like some of
that offering seems to have subsided as
this was a monster rally that was
sustainable. Now, the key thing here for
bulls, you want to get price back into
the top 50% of this parallel. That's
above $35.60.
You want to do so and then put in a
close above it then that flips this 50%
area area of the parallel from
resistance into support and frees up
SMCI to then attack the $42.35
resistance level. So, be watching that
in the coming days. If we fail right
here, first support worth any sort of
traction to provide a bounce is right
here at $31.74.
Next up into Palantir on the opposite
side of SMCI plunging down today nearly
7% closing down 6.98%
and in doing so, closing underneath this
key support level of $120.13.
Watch what happens if we have a daily
close underneath today's candle tomorrow
as that could open up a lot of selling
that could bring Palantir as far down as
the bottom of this parallel channel
which would be sub $100. Now, if I go
back back on the chart, you could see
that there's very key
pivot points here back in April of 2025
as well as March of 2025 just under
$100. I imagine that that level should
we see continued selling straight down
right past $100 with a slight pierce,
that would be a fantastic level for a
bounce to re-attack this 50% area the
parallel this $120 level would then get
flipped into resistance. So that could
be a fantastic target nice 20% pop
should we see some continued selling on
Palantir. Lastly just a couple charts to
go over. We touched on this last week
guys. Look at WDC still has the topping
tail intact guys. That's news worthy
because as you notice here, we put in a
topping tail back here on June 16th
negated it with Thursday's price action,
but we also backed it up with another
daily topping tail and we can at least
see today price action closed underneath
the topping tail. What's supposed to
happen? We should be having some further
downside on WDC with the next support at
678 and one last thing I want to touch
base on guys with you is Microsoft. Now
let me flip this over to a different
chart and show you the weekly time frame
because I think we touched on this last
week, but this is a very very big chart
here on Microsoft. We have a tentative
head and shoulders pattern with a
potential break line right here at $360.
If this measured move pattern plays out
guys, this could pull price all the way
down here to $160.
Now yes, there will be a lot of bounce
opportunities potentially even
re-attacking the neckline and also the
bottom of this parallel. Heck, we
haven't even broken this parallel yet,
but I see the writing on the wall. I see
the patterns that are developing and my
goodness even though Microsoft is down
quite a bit off the highs, this pattern
that's showing on the chart shows that
it could go much much lower in which
case I would just be a buyer. One of the
a company this big I I don't mind
tucking this away in a long-term
portfolio just buy buy buy.
Excuse me, average all the way down and
then wait for a returning bounce to this
parallel channel. Wow, what a chart
there on Microsoft.
All right, guys. That wraps up trading
the close. Uh thank you guys so much for
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Thank you again for watching. Look
forward to being back later this week.
We'll have a guest host with Gareth
tomorrow, but I'll be back on Wednesday
looking and finding new trade setups for
you guys. Until then, have a fantastic
day and I'll see you all on the charts.
Take care, everybody.
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