My Price Targets, Panics and Pivots for AMD, Micron, CrowdStrike
We've got charts on three tech plays, updates on semiconductor strength and the latest on the Gaza agreement.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Welcome. We've been working through the night because what we are is highly motivated and truly dedicated. We have a very special Market Recon morning note ready for you as the chill settles in, raccoons scuffle along, darkness ages and at some point, sunlight will pour over the horizon. So, put on some coffee. Then drop and give me fifty, or whatever you do have. Don't dog it. Once those cobwebs are clear and all thoughts of giving in to slothful temptation have dissipated, we begin. In pursuit of glory, let us proceed...
Peace!
On Wednesday evening (at least here on the east coast of North America) Israel and Hamas have reportedly agreed to a deal that would be the first step toward ending the now two-year war in the Gaza Strip. As part of the deal, Hamas has apparently agreed to release all remaining Israeli hostages held in the region, and Israel has agreed to withdraw military forces from a designated area within the Palestinian territory. Humanitarian aid to those living in the region will also be part of this deal.
The deal, which was steered by U.S. government officials, has been confirmed by both sides. Mediators from Egypt, Qatar and Turkey contributed to the process. After the announcement was made, Pres. Trump told Fox News that he believed that the hostages would be released on Monday. Egyptian officials, who participated in the dialogue, have expressed optimism that Hamas could release surviving hostages as soon as Sunday.
Trade
Bloomberg News is reporting that on Thursday morning, the United States approved billions of dollars' worth of Nvidia (NVDA) chip exports to the United Arab Emirates. The UAE, as part of this deal, has agreed to match U.S.-designed chip imports with an equivalent level of investment in the U.S. as part of its plan to invest $1.4 trillion (yes, trillion) in the U.S. over 10 years. This deal was actually agreed to back in May. The Commerce Department's security arm only recently issued the necessary export license. The idea here is likely an attempt to counter Chinese influence in the region.
Chip Strength?
Overnight, Taiwan Semiconductor (TSM) reported U.S. equivalent revenue of $10.84 billion for September and $32.44 billion for the third quarter. This was good enough for year-over-year growth of 30.3% and beat expectations by almost $1 billion. Year to date, sales are up 36.4% from the first nine months of 2024. Taiwan Semi will release its full quarterly earnings on Oct. 16. Strong sales performance at Taiwan Semi likely bodes well for the likes of key customers such as Nvidia, Apple (AAPL) and Advanced Micro Devices (AMD) among others.
Tech Strength!
On Wednesday, tech stocks led a moderately broad, yet powerful rally across the equity space. As gold continued to soar in defiance of a somewhat stronger U.S. Dollar Index, tech stocks followed suit. The Nasdaq Composite gained 1.19% for the session, supported by the Philadelphia Semiconductor Index, which was up 3.4%. The semis, in turn, were led higher by Advanced Micro Devices, Marvell Technology (MRVL) and Micron Technology (MU) . Those three stocks were up 11.4%, 6.4% and 5.8% respectively.
The S&P 500 added a more modest 0.58% for the regular session on Wednesday, as all of the small to mid-cap indexes gained anywhere from 0.86% to 1.04%. Of all of the mid-major indexes I track, only the KBW Banks, at -1.2% showed any serious weakness. That comes ahead of earnings for the group next week.
Breadth was solid. Six of the 11 S&P sector SPDR ETFs closed out the day in the green, obviously led by Technology (XLK) . The Industrials (XLI) finished in a distant second place. Energy (XLE) led the losers lower, but two of the bottom three performers for the day and three of the bottom six were defensive in nature.
Winners beat losers by about 7 to 4 at the Nasdaq and by roughly 3 to 2 at the NYSE. Advancing volume took a 67.8% share of composite Nasdaq-listed trade and a less impressive 55.6% share of composite NYSE-listed activity. As for aggregate trading volume, which is key, activity increased (+5.3%) on a day over day basis across Nasdaq-listings but contracted (-2.9%) across NYSE-listings and across the membership of the S&P 500.
No, volume on Wednesday, does not signal broad market support as much as it does signal continued professional allocation towards tech and specifically AI-focused investment. That probably foretells volatility as much as anything else. That said, a number of our target prices and pivot points were reached on Wednesday, so buckle up.
Advanced Micro Devices
On Monday, I increased my target price for Lisa Su's Advanced Micro Devices (AMD) from $188 to $234. Wow, was I ever too conservative. I see the stock trading with a $237 handle overnight. This is what I gave you on Monday, which turned out to be small-picture in nature.
Now, check this out:
If we zoom out and take an almost 20-month look at the stock, we see that AMD had developed a giant inverse head & shoulders pattern of bullish reversal and that the depth of the "Head" almost demands a much higher target price. I apologize for missing this earlier this week as I focused more on the minutia than what was staring me right in the face.
Target Price: $302 (up from $234)
Pivot: $189
Add: Down to 50-day SMA (currently $169)
Panic: Loss of the 200-day SMA (currently $129)
Micron Technology
On Sep. 24, I increased my target price for Micron from $188 to $196. This is what I showed you then, using the June 2024 high as the pivot...
While there is no new readily recognizable pattern present, there is the possibility of a Head and Shoulders pattern of bearish reversal forming out of what we have already seen.
While that sounds and this looks cautionary, an incomplete pattern does not make a fully developed pattern. Hence with the target achieved, I will make the recent high of $201 my new pivot and proceed from there.
Target Price: $241 (up from $196)
Pivot: $201
Add: Between the 21-day EMA and 50-day SMA (currently $168 down to $140)
Panic: Loss of the 200-day SMA (currently $108)
CrowdStrike Holdings
On Sept. 19, I gave readers a $555 target on CrowdStrike (CRWD) . No, the stock is not there yet. I gave you that target using the 50-day simple moving average as my pivot as the stock broke out from a Falling Wedge pattern.
The stock has really moved mostly sideways for most of the past month. This change is not in response to a change in price, this change is in response to my recognition of a pattern that was already there. This increases my pivot, and forces an increased target price.
We do have a well-defined cup-with-handle pattern with a $507 pivot. We do not yet have a definite breakout, but the stock is in the process of attempting just that.
Target Price: $633 (up from $555)
Pivot: $507
Add: down to 21-day EMA (currently $488)
Panic: loss of 200-day SMA (currently $423)
In The News...
- The U.S. Senate again failed to agree to reopen the U.S. government. A Republican party led bill failed in a 54-45 vote (60 votes required), while a competing Democrat-party led bill also failed in a 47-52 vote. Democrats John Fetterman (Pennsylvania), Catherine Cortez (Nevada) and Angus King (Maine) have voted with the Republicans. Republican Rand Paul (Kentucky) has voted with the Democrats and Republican Ted Cruz (Texas) abstained from voting.
- The U.S. Treasury Department raffled off $39 billion worth of new Ten-Year paper on Wednesday. A high yield of 4.117% was awarded. which tailed where the "when issued" was trading (4.114%) at the time. Bid to cover dropped to 2.478, which was below the six-month average of 2.57. Foreign demand ebbed as Indirects took home 66.8% of the auction, below the six-month average of 73.7%, but Directs (domestic accounts) grabbed 24.1% of the pie, which was the best demand shown by the home team for this series in eleven years. Dealers were left with 9.1% of this auction, which is below average, but up from recent lows. This was a mixed, but not terribly weak auction. I am not yet sure of what I think about the shift in where demand is coming from. I am just glad that there is still significant demand.
- There were absolutely no surprises in the Minutes of the Federal Open Market Committee policy meeting that culminated on Sept. 16. I do not think what the Fed thought on directional policy going into the government shutdown matters all that much at this point. What was notable was that as a group, the committee simultaneously showed concern over both softening labor markets and rising inflation. This gravitational pull of the Fed's dueling mandates will likely contribute to a forward-looking polarization in regard to where the overnight borrowing rate belongs.
(Tentative) Economics
(All Times Eastern)
08:30 - Initial Jobless Claims (Weekly)
08:30 - Continuing Claims (Weekly)
10:00 - Wholesale Inventories (Aug): Expecting -0.2% m/m, Last 0.0% m/m.
10:30 - Natural Gas Inventories (Weekly): Last +53B cf.
1:00 - Thirty-Year Bond Auction: $22B.
The Fed
(All Times Eastern)
08:30 - Speaker: Federal Reserve Chair Jerome Powell.
08:35 - Speaker: Reserve Board Gov. Michelle Bowman.
12:45 - Speaker: Reserve Board Gov. Michael Barr.
3:45 - Speaker: Reserve Board Gov. Michelle Bowman.
Today's Earnings Highlights
(Consensus EPS Expectations)
Before the Open: (DAL) (1.53), (PEP) (2.26)
After the Close: (LEVI) (.31)
At the time of publication, Guilfoyle was long NVDA, AMD, MU, CRWD equity.
