Semiconductor Selling Pressure Builds: Crucial Chart Setups To Trade

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Transcript

Hello everybody, welcome to trading the
close. My name is Drew Dosek and guys
today the day started off over in the
eastern side of the world with Taiwan
semi-reporting earnings. You might have
heard it on my trading game plan with
Gareth Soloway. However, guys, that
really was the narrative for all of the
day as there was a lot of memory uh
companies like SNDK, WDC that were hit
pretty hard. It was just nothing but
selling pressure for a lot of AI data
center plays today. So, we're going to
look at those charts. They broke key
levels. We're going to find levels of
support, something for you to keep on
your radar. Plus, we've got some very
good viewer request charts, some of
which like Nvidia, uh, XOP, as well as
Take 2 Interactive. With the very
popular Grand Theft Auto 6 coming out
this November, it's important we look at
that chart, see if all the hype has been
built up already, or if it's got some
more upside to go. Let's take a look at
the Spiders S&P 500 on the daily time
frame to start. Look at today's price
action, guys. Yes, we finished down only
about 0.54%.
But look at the intraday uh expansion of
price action. We were up here as high as
75457.
But most importantly, look at the lows.
747.88 tagging this declining trend
line. Now, yes, we confirmed a breakout
near-term on July 10th. But since this
has been a very weak breakout, guys,
tagging this declining trend line three
out of these four days after confirming
the breakout tells me the the gas in the
engine is really not there for the
spiders to continue pushing higher,
which is why I focused on the SMH, guys.
SMH is a leading indicator for a lot of
the markets. It often pulls the rest of
the markets in its wake despite this
being a near-term breakout. So for
tomorrow, does price actually get under
this declining trend line? If it does,
we we're very close to support on this
ups sloping trend line here at 744.97.
So be watching tomorrow 74749
to see if we put a close underneath that
range or if we still just continue
consolidating right on top of this
support level. Key thing though, look at
the bounce guys. Much like yesterday,
very big wicks all within this
consolidation. So, there's telling me
still a lot of buyers buying up right on
top of this declining trend line. Next
up into the Q's. The cues here, as you
see here, support did hit today. Much
further drop than the S&P 500, down
1.64%.
Support worked as it should. It did
pierce, but look where we closed, right
above it, guys. So, we're above 70539.
Tomorrow, though, that could be a
different story. Look how many times we
hit this level of support. That tells me
the next hit is likely breaking through.
We've already hit it now four times over
here. Fifth including this candle. Not
to even mention the times in which we
closed underneath and then bounced right
back. So this is getting pretty weak.
But it did its job today. Next level of
support 695 and 25 into the semis which
I've said lead the way guys. And I've
got a little cheat sheet here for you.
I'm not sure if you can really see it
but it is just very simple. One little
line that's right here. You know what
this is guys? That is a neckline of a
head and shoulders pattern that has
triggered today for the SMH. Now, do we
get conf uh a confirmation tomorrow with
some follow through pushing the price
down on SMH lower than today's low at
5645
and put in a close. If we do, this
neckline is then resistance and that
measured move becomes clearer in sight
down here at 46025. Guys, that's talking
about we could see a decline from
current price on the SMH for another 19%
move lower. We're already from the
highs. Let's just see where we are from
the highs. Already down 15%. So, we
could be down marching uh upwards of
over 30%
according to what patterns going on here
on the SMH. So, you got to be paying
attention to this neckline in the coming
days. Does price just uh move right back
above that neckline? If so, then this
target is wiped right off my chart. So,
we are on the verge of a potential
breakdown on the SMH, which likely is
going to pull the rest of the markets
with it. And I've been saying this,
guys, this is the leading indicator be
following what's going on on the SMH.
Next up, the 10-year yield. Not too much
new to report today. It did go up.
However, it's still the main thing. It's
still above this declining trend line.
All still putting in consolidation even
though it was testing it yesterday. It
hasn't quite hit this declining trend
line at 4.55% today. That's the key
level to watch for a relief in the stock
market if we break to the downside or
more pressure in the stock market if we
continue moving to the upside with the
next resistance 4.687%.
Next up into gold that did fall today as
well, but it didn't close underneath
this low range of consolidation. One
thing I pointed out today in the live
day trading room, you notice how these
were symmetrical bare flags. Big bare
flag here, big bare flag here. It was
almost the exact same thing that
happened. And then when price got
underneath this low pivot, we slipped
and slid further down on the chart. And
as you can see here, once we get under
this low pivot, what's been happening to
price action? Well, it's having a tough
time remaining above that horizontal
level at $4,98.
That's really what's in play right here.
Can price get back into the previous
bare flag or does it flush out further
low below the next level of support?
$3,886
followed by what I consider to be the
honeypot, the golden zone down here, sub
$3500. Notice all these pivots down
here. If we ever have price come
straight down, that will be your spot to
pick up some physical silver. Next up
into physical gold. Gosh, I'm all over
the place. You can tell it's a Thursday,
guys. It's been an incredible day in the
stock market. We've had a lot of action
in and out of trades. At first, some
levels getting missed, but gez, man,
it's it's a lot of action going on
today. So, to cover it all is really
quite a challenge. So, let's get back
into the charts. Next up into silver.
You see here on the daily time frame,
very similar with what I was explaining
on gold. Watching these low pivots that
created this consolidation. Now, we have
silver that's teetering on closing
underneath this candle on June 24th.
Watch uh when we do get a close in about
a half hour. The low is $5562.
Any close beneath that increases
probabilities of further downside with
the next support down here at $49.85.
Next up into US oil basically took a day
off down about 1.43%. But you can see
this is all consolidating right
underneath resistance. As long as this
continues, particularly another two or
three days, that will build the momentum
to break through resistance and push up
to 8575
on the chart there of US oil. Next up in
the NAC gas also had a volatile day.
Look at the highs and lows. We're quite
wide today. We had a low at 279, a high
at 293. Pretty decent trading action,
but look where we're finishing, guys,
with another wick on the bottom of the
charts explaining and and confirming
again a lot of buyers are stepping up
right here. And this could be unique.
You know, Nat Gas could be utilized as
an alternative power source for these AI
data centers that are building out. So,
that very well could be the play for Nat
Gas to really start ripping up on the
charts. In addition, with the north uh
northern hemisphere winter encroaching
in the few few months, about 3 to 5
months. So, all of that should be in
line for planning to potentially start
picking up some Knack gas support here
at 275. We very well may not hit it.
Particularly if we get above this key
horizontal trend line holding down
current price in the last four trading
days right at $2.90. If we start putting
in daily closes above this that'll
peique my interest that NAC gas can
start lifting off attacking this
declining trend line which is the
neckline of an inverse head and
shoulders pattern that could take us up
here to $4 on NAC gas if and when we
break this trend line right around
$3.30.
Next up into Bitcoin. Bitcoin today just
down ever so slightly. Uh keep in mind
it is battling trying to get back into
this parallel channel and doing so
somewhat creating another inverse head
and shoulders. If this does get
triggered, we could anticipate Bitcoin
marching up to 71,000 in this range
72,000. Uh we'll be watching this
closely in the coming days over the
weekend. We generally have lighter
volume on Bitcoin, but right now it
looks like it's settling in right on top
of that bottom barrier of the parallel
channel. Now into the chart that really
kickstarted some selling pressure today.
You look at Taiwan Semi. Check out their
earnings. Wasn't really that bad, right?
They beat EPS by 10.78%.
But then they missed on revenue by 1.2%.
The real underlying theme of this story
though was that margins were starting to
get squeezed. And really margins is what
Nvidia's been boasting is what all of
these other memory companies have been
boasting and chip companies with the
high demand for these AI data center
buildouts. very large contracts, very
high cost for all of these components
helping these tech stocks stay afloat.
Well, if margins are starting to get
squeezed, that kind of pops a hole in
the narrative for all of these increases
in these charts for these tech
companies. So, thus, we had a slight
decline here on TSM. Now, notice we've
already closed a couple days beneath the
50% area, this parallel. So, any bounces
up, this level will be resistance at
43480. Next level of support will be on
this gap fill 393. Notice how this high
pivot at 390 is just underneath that. So
390 to 393 is the next support zone
followed by the bottom of the parallel
$374.72.
Next up, check out BE down 13.64%
today. Nasty decline plus closing near
the lows. Really right into a near-term
support trend line. You can see a hit
here once, twice, and now today the
third hit. So this is curious. Be has
seen a steep decline since here on June
25th. So far we are now down 40 plus%.
That is a massive decline. We did have a
decent bounce, but man, that's that's
really disrupting here on the chart. So
we are very close to a bounce level.
Notice though, the RSI is not at 30.
Sitting here at 36.61 61 doesn't mean we
have to get to 34 a bounce. See these
other bounces occurred without breaching
that 30 level. So I want to bring this
to your attention here. Basically this
support zone 20385
down to the bottom of this parallel
channel 1932.
Right in that range should develop a
bounce right up to this pattern that's
shown on the chart. Look at this. A big
M on the chart. MA patterns are
notoriously strong when price bounces
into the low pivot of the center part of
the M. So you should be experiencing
some decent resistance here at 23130. If
we can get through that, this fib level
will be minor resistance at 23918. But
my all my eyes will be right over here
for any bounce that occurs either on
this declining trend line and or the
bottom of the parallel channel would be
a nice place to go ahead and snag those
profits or at least trim them. pocket
that money and get on to the next trade
here on WDC,
guys. Head and shoulders break and
confirm. Left shoulder here, head here,
and a right shoulder there. Closed under
it yesterday under the neckline
confirmed today. Tag support got a
bounce up at the end of the day. All
foreshadowed by this daily topping tail
registered back in June 18th. Beautiful
decline. Look at that sharp decline even
creating that right shoulder. It almost
looks like a straight line down 43% from
the top. This support area likely will
at least provide a bounce up to this
neckline 527. We see if we we'll see if
that can happen. This selloff has been
fast and furious much like the ride up
that's been fast and furious as I
flipped on that RSI. It's not oversold
near term, but at least right now this
is the support area in contention which
could provide a potential retest of the
neckline after the confirmation. Just
keep in mind, guys, the measured move is
down here at 21258. I don't think it's
going to get all the way down there
unless we have a serious market sell.
Notice all of these pivots that occurred
back here in March of 26 as well as
February of 26. We're likely to catch a
lot of support down here around the 315
$300 level if price continues to flush
after a little retest of that neckline.
Next up, we've got uh on the other side
of the story, guys, we got some breakout
scenarios to talk about. Check out this
chart on Best Buy. This is the daily
time frame. Notice how we've got this
declining trend line. Let me flip to the
weekly to show you where that comes
from. That's a little ways back here
before 2022. It's in November of 2021
connected to this pivot high that
occurred in September of 24. and Best
Buy ran straight up into this trend
line, put in beautiful bullish
consolidation while tagging and testing
this declining trend line the last two
weeks. Breakout mode for Best Buy. Great
push getting above this high pivot from
October 27th. So, if you're bull on Best
Buy, you want to see a close above this
pivot that would be very strong for Best
Buy, enabling it to push up to the next
resistance at 9313. Now, we've got a
confirmed near-term breakout on Best
Buy. any pullbacks down here to this
trend line, 77.87 would be a buying
opportunity for continued upside
movement there on Best Buy. Next up in
that same similar category as far as
tech, we got Take Two Interactive. Now,
this is a viewer request from Mike Marc
Marissi. Sorry if I pronounced that
incorrectly. And thank you to all my
viewers, by the way, too. You guys have
a ton of great comments, ton of great
charts and levels that you're finding on
these. So, this one too has been on my
radar. I do like Grand Theft Auto.
Haven't played it in years. I'm an older
guy now. I very well may end up getting
this game just to have a little bit of
feel of nostalgia from my younger years.
However, look at what's on this chart of
Take 2 Interactive on the verge of
potentially breaking it too to the
downside. We've got an inverse head and
shoulders pattern with a targeted
measured move up here at 308 and50. Now
look what happened over here just a
couple trading days ago on July 14th. We
put in a daily close back underneath
that neckline. Then yesterday we negated
that downward movement and closed above.
Now today we're closing back beneath
this neckline. The confirmation signal
was not confirmed yet to the downside as
that would have implied we needed a
close beneath Tuesday's low on Wednesday
and we didn't get that. So now the can
is kicked into tomorrow. Do we get a
close tomorrow underneath this July 16th
candle that occurred today? If so, then
it is a confirmed break of this inverse
head and shoulders pattern with the next
support at 21908. However, guys, a lot
of upside potential here. So, it's
worthwhile checking out where price
closes tomorrow. If it can get back
above that neckline, cancel out some of
this negative closing that's occurred
the last couple days. The neckline for
tomorrow, $241.91.
You want to see price get back above
there, start extending as that will
continue to increase probabilities of
this targeted measured move to play out.
Next up, another viewer request from
Derek Mertz on XOP. This is a ETF
covering oil and gas exploration. Not
sure if you can see it too well, but
it's back there on the canvas behind
some of the chart details. All right, so
for this chart, I'm starting out here on
the weekly time frame. Notice here we've
got it's it's a peculiar inverse head
and shoulders. It's not really forming
the nicest right shoulder. So, I'm kind
of breaking this bigger pattern down
into some smaller um um analysis as
well. So, near-term, we've got an
inclining parallel channel with right
here this declining trend line, the
breakout spot that occurred most
recently. Noticed here too when I zoom
in, great breakout to the top 50%.
Couldn't hold it. Instead, came back
down, retested this trend line, and has
since bounced. Perfect for what we teach
and explain and show and repeat in this
show so often. Breakout retrace bounce
play in effect here on the XOP. Next
resistance will be the 50% area of this
parallel channel at 172 and30. But back
out to the larger time frame. If we can
get price above these pivots, much like
where price was back here on the surge
into the top 50% at the beginning of
April, if we can get a back above here
and establish, man, we do have some
momentum and a pattern on this chart
that shows me there's a major move up
here to 2961.
It's all got to navigate the 50% area
first, this previous pivot high at 191.
And if it can do that and maintain above
191, we've got the top of the parallel,
but probabilities start increasing for
that to get broken and price to meander
up here to 29611. So, an interesting
chart going on here on XOP uh for a
medium to longer term play. I know we
covered this the other day, guys, but I
got to highlight the fact the more and
more we hit any levels of support, much
like I described on NBIS the other day,
look at how that breaks. Nasty slip and
slide. It is summer after all, right
guys? So, it did slip and slide straight
down this chart. Tag support 169.95.
Right now, it's settling in just above
that. Not too good. If we get a bounce,
any sort of bounce will take us up to
resistance at the top of this parallel
channel 1977.
Next level of support down here at
15478.
Notice how that corresponds to with a
gap fill that occurred back in May of
this year. Lastly, guys, into Nvidia.
Another user request by old a boy Raven.
And sorry if I've slaughtered any of
these names. You know how it is on
YouTube. They've got some very curious
and uh creative names to say the least.
All right, so back into Nvidia, guys. So
Nvidia, as you see here, inclining
parallel for the large majority of its
trading since the liberation day lows
back in April. We did have a head and
shoulders pattern very sharply uh uh
angled with a neckline in this
direction. It's still active, but then
we actually had a better head and
shoulders pattern with 19958 as the
neckline that has been negated. So,
right now, I'm just focusing really on
what patterns are going on without this
very sharply inclined head and shoulders
pattern. All right, so resistance has
been tagged 21317. That's the line in
the sand. Very interesting candle though
that appeared yesterday in July 15th.
This is a hanging man candle. It's not a
topping tail, bottoming tail. It's a
narrow body bar, but notice the reaction
from that resistance straight down on
the chart. Now, if you're bull on
Nvidia, you want to see tomorrow close
back near the top range of today's
candle or even higher, continue
consolidation so that it can attack this
213 level again and then go back up and
try to get back up to the all-time highs
near the 50% area of the parallel
channel. Otherwise, a rejection here
will pull price back down to this
consolidation at $200 and then the next
support on the bottom of this parallel
channel 193 uh and 41.
All right, guys. Lots of stuff we went
over today. I feel like there's I could
have this show go on for another hour,
hour and a half with all the tech moves
and all the head and shoulders patterns
and everything I want to keep you
attuned to. So, we'll just roll that
into next week. I'm sure there's going
to be plenty more opportunities that are
going to hit this screen so I can convey
to you guys. Thank you so much for
watching and tuning in today, guys, all
this week. Don't forget to like and
subscribe to the video. Send it out to
your friends and family so they too can
learn technical analysis on the charts.
Guys, have a fantastic weekend. Enjoy
yourselves. Be safe. Get ready for
Monday so we can wrap up trading the
close again. Until then, take care
everybody and we'll see you on the
charts. [snorts]