The AI orgy party is in full swing. The House is Rockin' as Stevie Ray used to play. There's some bad honky-tonkers laying it down here today for Memorial Day. Thank you to all who gave their lives for the United States.
Companies are saying the words "artificial intelligence" to watch their stock prices jump instantly higher. It is reminiscent of the bitcoin/blockchain hype. You coul be selling shoes or plumbing supplies but when you said blockchain your stock doubled. Same-o now.
Marvell rocket launches on the AI hype. The orgy is marvelous if long MRVL. Booiiiinnnng. The green lines show the falling wedge, oversold conditions and positive divergence for all chart indicators that guarantied the bottom and move higher. The blue inverted H&S has a head at about 35 and neck at 46 so that is a difference of 11 so the upside target for the head and shoulders pattern is 46 +11 or 57 and it occurs satisfying the H&S.
MRVL is at 66 with upside momentum in play for all the chart indicators so she likely needs about 2 to 4 weeks to top-out. Keystone's 80/20 Rule says 8's lead to 2's on the way up and 2's lead to 8's on the way down. A cross above 68 will likely open the door to 72. The 71 to 76 zone is a good candidate for where Marvell may top-out on the weekly basis in about 3 weeks. Simply watch the progress of the chart and you can call the top when the indicators all go neggie d.
NVIDIA is the poster boy for the AI orgy. The CEO is in Taiwan waving chips around in the air as if it was the Holy Eucharist. Traders buy NVDA with both fists knowing there will be a bigger fool around the next day to unload the shares. When you look around and there is no one there to sell your shares to, well, you realize that you are the bigger fool.
NVDA takes out its prior high from late 2021 which hints that MRVL may want to do the same. NVDA prints the new price high with the histogram, stochastics and money flow in negative divergence. The RSI, stochastics and money flow are overbot agreeable to a pullback. The MACD line is working up towards nosebleed levels. The negativity hints that a rest may be needed on a weekly basis (pulse backward for price) but the upside is not finished.
The MACD line remains long and strong wanting another price high after price retreats due to the negativity (red lines). A potential outcome is a jog move, down one week, then back up for the following week to a matching or higher price high at which time the MACD line and RSI will go neggie d joining the other indicators and calling the top for NVDA on the weekly basis. You do not have to guess; simply watch the progress of the chart and you can call the top.
NVDA also displays an inverted H&S pattern. With a head at 110 and neckline at 190 that is 80 difference so the upside target, if the neck is violated, is 270. Price breaks up through the neckline and tags 270 satisfying the H&S.
The SOX semiconductor index is shown above and it also enjoys a two-week orgy rally due to the AI hype. Folks, artificial intelligence is not going to clear your stuffed-up toilet during a graduation party or fix the flickering light and faulty wiring in your dining room. However, Joe the Plumber and Edna the Electrician will.
The SOX is hitting some price resistance from a year ago. The new high over the last 3 months comes with the histogram, stochastics and ROC in neggie d and the RSI and stoch's at overbot levels agreeable to a pullback on the weekly basis. However, the RSI remains sloping higher. Ditto the MACD line and there is momentum in price due to the AI hype.
Thus, a jog move is needed before she can top-out (down-up). The red lines will create sogginess probably in the week ahead but the green lines will try to create more lift in price after the pullback. Thus, the socks should top-out in a week or two; the chart will lead the way and once the weekly chart is ready to give up the ghost, the daily and hourly charts can time the short entries.
In the previous Amazon chart, Keystone told you these babies were not ready to short as yet. Anyone shorting NVDA or MRVL is now wearing a loin cloth and holding a tin cup. The charts show that SOX and NVDA have a good chance of topping-out in a week or two but MRVL may take 3 weeks or so. There is no reason to become involved in the AI orgy long or short right now. Wait for the charts to set up as described above and you can probably begin to short in a couple weeks. Let the charts tell you when. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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