Tech Overextended: How to Short the Bounce & Find the Next Long

Welcome to today's best trade setups. My name is Benjamin Pool, head trader here at Verified Investing. I want to start this video by saying every once in a while you're getting a market where it seems like the technicals aren't working. And I'm just going to caveat with that saying, "Okay, this is a probability game. The technicals work when you align them with multiple factors. Every once in a while you'll have one or two factors that end up failing. But I'm going to show you a couple different charts where the technicals actually played out pretty nicely. So, the more you can stack the technical factors with up sloping trend lines aligned with gap fills, you're going to have a higher probability of that actually playing out. So, if you decide that you want to stay away from technicals or you're saying that the whole market, the technicals aren't working now, you're going to miss out on a lot of trades. I took an Nvidia trade at $220, a whole round number, psychological level. There wasn't a ton of resistance ever, but because it was a psychological level, I was able to take almost $3 to the downside. For the day trade, that's actually a pretty substantial move to the downside. SanDisk, I took that at 1,600 bucks and I got over $3,000 because the technicals worked. Now going into Friday session, the technicals didn't work as well. And that's okay. That means we just jump into the next trade, look at the next trade setup, and hit your probabilities over and over and over again. And if you have your stop out levels and you understand that this is a probability game, then you can still navigate each individual trade, stop out, fine, that trade's over, move on to the next one. One thing that a lot of investors get kind of inside their head, they get hyper focused on one particular chart. And because this one chart isn't playing out or these two charts aren't playing nicely because they've negated topping tails, now all of a sudden the entire market is just not working. That's not true. So, just jump into the charts find that next support or resistance level and just play it just like it's a new trade, it's a new day. All right, let's jump into the charts. That's enough from me. The Trade Desk has this nice down-sloping trendline. Oh, let's actually go into the S&P 500 first. And I may have to restore all of these connections. So, here is the S&P 500. We got a little bit of a rejection. What I'm going to do is I'm going to show you where this up-sloping trendline comes from. You got this pivot top here, secondary hit, third hit. I know I have had multiple trendlines. And each one of the trendlines has gotten a minor pullback, minor pullback, and now we're going through it. So, the line in the sand that we're monitoring right now, this is actually a shorter-term timeframe. However, this is what the stock market is looking at. Pivot low here, secondary hit, try to break below, but that's the third hit, fourth hit. Now we're hitting on it again and we're getting this nice bid. Right now, the markets are respecting this up-sloping trendline more than this long-term up-sloping trendline. So, if the markets keep staying above this up-sloping trendline until we get a break with a confirmation and a reversal, the uptrend is what's going on with the S&P 500. So, this technical isn't working, this technical trendline. However, this one still is in play. And so, we got to look at additional technical factors, maybe on a shorter timeframe. Overall, this long-term trendline will eventually play out and we're going to have a nice reversal, but in the meantime though, we have to respect the uptrend. Same with on the QQQ. What I've had is this long-term up-sloping trendline right here. I'm going to zoom about. Here's a pivot top here, secondary hit. Not sure what happened there. Third hit, we got a minor rejection. So, what do we do? We look for our next level of resistance. So, here's a hidden trendline, pivot low here, secondary hit, third, fourth, fifth. Finally, this upsloping trendline broke, and then that's when we had our fall. Right now, it's retracing to the scene of the crime. This tells me that there should be some sellers sitting here. But, because we still are in an uptrend, look at this upsloping trendline on the daily timeframe on the QQQ. This is a vertical move. The probabilities do favor a pullback. However, with this upsloping trendline intact, that is going to continue the move to the upside until we finally break, confirm below, and then we retrace. That's when the top is in. That's when we can call the top in, and that's when the probabilities dictate more of a pullback. Yes, this resistance trendline, we're into it now. Probabilities dictate there should be a pullback, but the markets are eyeing this upsloping trendline right here, and that's why the markets are continuing to push. So, we have to wait for that reversal. Technicals, $125 level. I'd mentioned that where's where I I thought max upside was on the Intel chart. However, what I didn't account for was the fact that Nvidia was going to have a deal with Intel. So, what happened? It ripped through that level and got as high as $130, but then eventually came back in and closed right at the $125 level. So, had you entered at 125, dollar cost averaged all the way up, cuz I did say my level was 120. You could have dollar cost averaged up every dollar 20 to dollar 30 higher on Intel, and then waited for that capitulation at the top, and waited for a pullback. Now, in the premarket in in Intel did INTC did get up to $135 or pretty close to it. So, for me this is where I would look to short it. On a 15-minute closing basis though, if it does close above 135, that is my stop out level. Got to protect capital. On the downside, this long-term up sloping trend line right now is where the next level of support is. So, if you're aggressive, you could go long at $111.48. Now, with this broken up sloping trend line, this would be a retrace to that level. Knowing that that your next level of support is going to be the secondary up sloping trend line sitting at $188. On a daily time frame, this move isn't even close to a trend line. Look at how far away it is from this current trend line. So, in order for us to start getting back below and reversing this up move, we need price to start consolidating sideways. Once price can consolidate sideways, get to this up sloping trend line, then break just like the S&P 500 and the Qs. Once that breaks, then we could play this on a retrace. At that point, the probabilities would dictate there would be an additional move to the downside. Right now, the markets don't care and so we have to look at where the next level of resistance is or your next level of support if you're a buyer on Intel. STX has this nice move to the upside. $800. That was a key psychological level and you had a pullback from that level. So, today your next psychological level was 225 or 825. It got above there, got as close to pretty close to 840. As you can see now that we're above $800, that kind of opens the door for a move up to a 850 all the way up to $900 on the chart of STX. Up sloping trend line. Here's a pivot low here, secondary hit, third hit, fourth hit, finally got broke below, never confirmed, and then all of a sudden on the back of earnings you had this nice surge to the upside. So, this is a lot closer to potentially breaking an up-sloping trend line and then confirming below than Intel is, just because of the nature of how close it is. So, similar with Intel though, we need price consolidate, get to this up-sloping trend line, finally break below, then the confirmation or continuation move below this trend line, then all of a sudden we can play this on a potential retrace on a key psychological level. If it does get a up to 850 bucks today, I am a shorter at this on STX as long as it's before 2:30. My stop out on a 15-minute closing basis is above my entry price. Learning to navigate these types of situations, these types of trades is going to be paramount to stay saving capital. SNDK got as high as $1,609 in the pre-market. Because the $1,600 level was a key psychological level in the live day trading room, I said, "If it gets above 1,600 bucks again, I'm going to take this for a short." And so, we got into this trade and I said, "Because of this overextended move, look at this." So, you got as low as 1,291 bucks all the way up to $1,600. That is a 23% move in 3 days. SanDisk usually has a pretty solid pullback. I was actually looking for $50, and that's what happened. I took a $50 gain on SanDisk because of the key psychological level. So, for me today in the afternoon session, I would be looking for 1609 or 1610 pierce as long as it gets there by 2:30. If price does get above that level on a 15-minute closing basis, I would look to stop out of that trade. I wouldn't dollar cost average into SanDisk, especially if it takes out the $1,600 level again. That would be my first level that I would short SanDisk. Palantir, restore this connection. It needs to drop a little bit more for me. You have this nice down move, a little bit of price consolidation. So, for me, this is more favoring a move to the downside as long as we can take out this little pivot at about 130 bucks. On a swing trade basis, I like this 128.06 level for a little bit of a starter position. Um for that's a little bit more aggressive. Or this pierce of a $125. If it does drop into that level, I would love to pick Palantir up for a trade. Micron, here's this up surging trend line. I 725. Here's this pivot top here. Secondary hit. 725 was my potential max upside yesterday. Or excuse me, on Friday. It didn't work out. And then what do we have to do? Do we say the technicals don't work? No. That's not what we do. We say, all right, well, where's the next level of resistance? Pivot low here, secondary hit, third hit, price got below it, retraced it before this pretty solid move to the downside. Now that we've had this overextended move to the upside, this should be some solid resistance. Pierce the $800 psychological level into resistance, two factors, and that's why we're getting a pullback. Now, we did have a topping tail on Thursday. It got negated on Friday. So, that would be your stop out had you played this at a retrace. And then you could either re-enter it at this up surging trend line had you drawn it in the charts, which I didn't at the time. Today, I just noticed it. But it could be putting in another topping tail. Had you gotten in even at the uh $770 level. Your stop out would have been 11%. That's fine. That is part of trading. Every once in a while you have to take losses, and then you move on to the next trade, look for additional resistance levels, and then had you gotten in at this up surging trend line, again, I did not because I didn't have this in the charts. You could have recaptured about 4 or 5% taking it off the table because Micron is looking like that's about what it gives you back, about 5%, 6%. And then you look to replay this on a topping tail if it does end up hitting there. So if this does is a topping tail, you just replay it like this topping tail. Every once in a while they would get negated, but once it puts in a secondary one or a third one, then that's likely when the top starts to form. ANET ANET I was anticipating a little bit more of a sell-off. $141.18 was that level yes on Friday. My long level today is still $133.70. If we can get it this fall into this trade by 2:30, that is where I'm picking up ANET for a long. Close below this on a 15-minute closing basis is where I'd look to stop out. NET did have this nice fall. I was expecting a little bit more of a sell-off. $190.13 today is your aggressive level. After this sell-off, so it got up to 204 bucks. That would be a seven almost a 7% move to the downside. So those aggressive traders look for 190.13. That is likely where it's going to stop today. However, if it does start flushing that level, you would look for additional support at 178.46. Another gap in the charts at 166.99. And then this low pivot in this area at about 160 bucks. This 160 level looks like a great opportunity to start a swing trade. These are just day trade levels, which I don't expect to get down all the way to these bottom levels today, but look at those levels in the coming days going into the later part of the week. ARM restore this connection. ARM I still want a little bit more of a fall. It got rejected at this gap in the charts after the sell-off this morning. Got a nice rally. And now all of a sudden we're having a little bit more of a sell off. We're slightly negative on the day for ARM even though it's a green bar candle. What I would be looking for is price to get below 208.84. Once it does that, then you're going to looking for a nice move down to about $187.34. This would be an area that I would be interested in going long in the next few days just for a quick scalp. Aggressive level is 187 but less aggressive level. Not only do you have a $175 gap in the charts, but you have that psychological level as well where a lot of buyers are likely sitting on the chart of ARM. KSS Here's an up sloping trend line. Having a nice sell off today. Pivot low here, secondary hit, third hit. For those of you who are aggressive on and still playing technicals $12.98 or depending on when it hits this up sloping trend line is where you'd look to get into this trade. Not only would is this up sloping trend line, but you have a secondary factor which is this gap in the charts right here. $12.89 is where your long level is not only for a day trade, but this could also be a swing trade. Knowing that if this up sloping trend line does break on a daily closing basis you could either look to stop out of the trade or look for additional support which is right about the $12 level. And that would be a decent move to the downside actually because it's a $13 stock. That'd be about a 6% move to the downside. For me, that would be my exit strategy. If it does close below that on a daily closing basis with confirmation, I would stop out of Kohl's. But again, this up sloping trend line with this gap in the charts, even today is looking for like a good long and a swing trade level. Uh excuse me, day and swing trade level. Celsius Lot of price consolidation right on top of support. Look at all of the support in the area for Celsius. You have this might major pivot in the charts right here at 12 12 $28.20. This is where you're going to get a lot of support on the chart of Celsius. This is the first level. Here's the secondary level. You have this previous gap in the charts that if it does get down a little bit lower, $25.76 or you could be a little bit more conservative and wait for the whole round number of $25 to get enter this trade or add to the position. First level of support, secondary level of support. I actually like that $25 level. And then my last level of support, if it does continue to fade, is $21.20. These are aggressive levels. This is more of a a little bit more of a conservative, but this is ultra conservative at $21.20 for a swing trade on the chart of Celsius. ELF Here's a great opportunity to to look at how technicals work. You have this really big gap in the charts. Big gap from the lows of April 2025 before ELF had this huge surge up. Look at the size of the gap from where it ended. So, it gapped up, ran up 174%. Price action came back in, got down 63%, filled that gap. As you can see, there were people sitting there. So, $55.33 is still a good gap in the charts on ELF. If it does get to that level, for a day trade, that is where I'd be looking to pick it this up on a swing trade basis. This is not my swing trade level. My swing trade level is $49.40. You got this low pivot in the area. Little bit more aggressive traders, you could just look for a 500 or $50 pierce, but for me, I'm a little bit more conservative, so $49.40 is that level. Now, what we've got to be monitoring, though, is this down sloping trend line. You got the pivot top here, secondary hit, third hit, fourth hit, fifth hit. Finally broke above, never confirmed, and then all of a sudden you're having this nice rejection. So, just like the opposite end of the S&P 500 where we're monitoring this up serving trend line for a break down, ELF we're looking for this down serving trend line for a break up. So, if it can consolidate right on top of this gap in the charts at 5533, get above it, confirm, and then retrace, this is your swing trade level. You have to get above it and confirm above, and then wait for that retrace for me to be bullish on ELF. That's why it because it hasn't happened yet, 4940 is that level for me on that chart. TTD, The Trade Desk, I really like this charts. We're monitoring this down serving trend line. Pivot low here, excuse me. Pivot top here, secondary hit, third hit, fourth hit. Price tried to get back above it. Closed above, and then got rejected. This shows you that this down serving trend line has a lot of resistance. We did have this nice fall. It actually got below $19.73. So, really what I'm looking at is that is my line in the sand. If we can get back down to 1973, that is where I'm entering a swing trade, knowing that if it does close below that on a daily closing basis, I am exiting that trade and looking for my next level support. If I do get into that trade at 17 or 1973, I would be monitoring this down serving trend line. If it breaks above that, confirms above, maybe can take out this 2475 level, and then retraces scene of the crime, the the more times resistance levels are hit, the weaker those resistance levels get, and then I could see TTD moving up to at least 2621. As you can see these pivot lows in the charts, look for price consolidation, and then ultimately I think that we're coming back up to $33.20 or $33.81 or somewhere in this area, right around the $33 level. Anyway, wow, this is a lot longer video than I anticipated. Thank you so much for joining me and I really appreciate you. Thanks for all the comments. I know I don't comment back on all of them. However, I do appreciate all the the positive feedback. If you guys have any additional charts you want me to go over, I would be happy to as long as we can get enough likes on that particular chart and if it's interesting to a bunch of people, then I'll go over it in the next show. So, thank you so much. Oh, yeah. If you guys are getting something out of this, please make sure you're liking, following, subscribing and sharing with those friends. That way they can get the same information you're getting. And last but not least, Drew Dosik is going to be going live trading the close at 4:20. You guys don't want to miss that for a end of day market recap. You guys have a great rest of your day and take care.