Transcription
Hey folks, welcome to verifiedinvesting.com. My name is Gareth Soloway, chief market strategist here.
Now in today's video, we're going to talk about the great rotation that is just beginning. And again, this rotation is from semiconductor chip stocks like the Nvidia's, like the Intels into software. So, we know software has been decimated, but just in the last few days, the moves are starting to come back. We're seeing the the earnings from Dell, which again is more data center related, and IBM news, this is starting to catapult beaten down software stocks, and we're starting to see a rotation of capital. There's to me is a big opportunity here. I want to go through the charts with you guys and show you everything.
Now, before we do that, I just want to mention folks, I out of popular people asking, I did launch a YouTube membership. It's very cheap. The idea is I understand some people can't afford to join verified.com for $150 a month. This is only $10 a month. I just named it Gareth's Top Squad. It's a way to support my channel, but I'm also once I hit a thousand members, I'm going to start be start doing uh member videos and member live streams and different things. And as we grow, I'll add more and more in there. Um, initially to be very little because it's obviously very little um in terms of a monthly thing. You also get individual badges that are unique that I created, very cool ones, um, as well as cool emojis and you obviously get highlighted in the comments section. So, check it out. If it's something for you, awesome. I did want to just mention that. And I thought it was pretty cool um that it gives you that ability here on YouTube to do that. And then ultimately over time as that membership grows, I can really start expanding uh what I do for members.
All right, so let's talk about this. Take a look. Here's Intel's chart. Intel on Friday down 5%. Now, the stock market was up. Wasn't up a lot, but it was up decently. What we're looking for here on Intel to confirm that the rotation is fully intact. We have a high, we have a lower high, we have a low. Does Intel come down and make a lower low? If that's the case, that confirms this rotation that I've just mentioned is fully in play. Look at Nvidia. Nvidia again, incredible trend line hit, but look how it's behaved just over the last two weeks. Uh, Nvidia has dropped beautifully here. We're now talking about basically a 10% pullback. All right. Now, again, other names out there that are starting to show weakness, we're even seeing names in the memory uh semiconductor chip area like Lum. Look at this L momentum chart, folks. This is a very interesting one because look at this trend line trend line break retrace and now it's heading lower. And you can even make a case that we have a head and shoulders pattern forming right here on Lmentum that could be on the verge or maybe just broke. There's your shoulder head and shoulder pattern bearish formation. All right.
So again, the thesis isn't that to me that the stock market is going to correct here in a major way. I think that will eventually happen, but the charts on the S&P and the NASDAQ are still strong, still higher highs and higher lows. But within the semiconductors or within the AI trade, there does appear to be a rotation taking place. And we're going to go into this even more. Let's take it a step further. All right, what do we have here? Well, take a look at Taiwan Semi. Taiwan Semi, yes, it's right near the highs, but on Friday, it was down. Okay, so again, these are leaders that are showing weakness. When the NASDAQ made a new all-time high on Friday, Taiwan Semi pulled back and notice the major trend line of resistance. So, is this beginning to see that rotation of capital sellers in Taiwan Semi that might be going into other places? Stocks that I'm watching next week to see if this is confirmed, Micron. Micron did make a new high, so we haven't seen that here in Micron. But again, that analyst gave that ridiculous price target and that's kept the buyers, the retail buyers fomoing in. I'd love to see the stats on institutional dumping into the re retail FOMO. All right, but that's one there that I'll be keeping an eye on as well.
Now, let's talk about where is that money going. Well, first of all, look at Microsoft. So, Microsoft, this is what we would call a classic cup and handle pattern. I highlighted it in my trading game plan a few days ago. So again, you would have captured some serious alpha on this one already. But look at the move here. Notice how we just looked at stocks that were at all-time highs or just coming off all-time highs. Those were the chip plays, right? The chip plays, the physical chips, the Nvidia chips, the the Intel chips, those type of plays, right? the memory chips like Lumenum, okay, those are are up thou a thousand% or whatever, you know, over the like especially Lentum. I mean, the stock was like $200 um a few months ago. It it got up over $1,000. Now, it's corrected back to the 800 level. So, we've we've gone from stocks that have had these massive runs to names like Microsoft that are now still way off their all-time highs. And these bullish patterns are really starting to ignite. Another one, look at this. Look at Oracle. All right, if you zoom out on Oracle, it made its all-time high last September. It fell from $345 down to $135. And then look at what's happening in the last couple days. We're already seeing this. IBM, look at this, guys. IBM big drop because of the worries over uh software and and potential data centers and the costs and all that. And look at what it's done recently. Now, this is it's too late to buy in my opinion. I'm not rushing into IBM after this massive move. I mean, it's just literally gone from $212 to $300. But there are to me opportunities here. So, number one, I'll be watching for resistance up here if it gets there. But number two, the key here for me is starting to look at ones that are just coming off their lows. So what would some of those names be? Adobe. Adobe here. Look at the move on on Friday on Adobe. It was up 7%. This is still way I mean look at this. Now listen, there's no guarantees, right? I mean there's no obviously everything I'm talking about is probability based as we again as we should know. I hope everyone understands that. But it's looking for the breadcrumbs that make me the casino, not the gambler. So, sure, I absolutely have bad calls. Like, I was way early on shorting the semis. Um, again, I think I'm going to have be paid out when they collapse, just like I'm sure Michael Bur will be paid out as well. But the idea here is there's an opportunity in some of these beaten down names in the near term for swing trades. Listen, I don't think Adobee's going back to all-time highs anytime soon because AI is going to take some of their business. But, did it get overcrushed here? Did it get slammed down way too much? Is there an opportunity where they can actually use AI to their advantage? Yeah, I think there's upside to 300 and change here. It's another, you know, basically 20 25% upside potentially on this. And then the key here for me is looking at the ones that haven't started to move much yet. ASA, look at AAA here, down from $27 in in basically the beginning of 2025, comes down to $6 to $5. It's now starting to bounce. I think this comes back right in here around $11. Teams, which is Atlassian. I mean, look at this move just in the last couple days starting to push up. And same thing, you kind of have a pseudo cup, but look at that beautiful bull flag beginning to break out here. I think this has upside to $145 before it ma enters major major resistance.
And so, I guess you guys are seeing the thesis here, right? I mean, it's a very very crisp thesis. It's that money, at least institutional money, right? If you want to call it smart money, whatever it is, institutions are saying, "Okay, we've seen these massive runs. I mean literally since March, the end of March, so April, May, and and basically in two months, semiconductor chips like Micron are up like 200 plus percent. Right? I mean, just incredible moves um to valuations that are getting stretched. Institutional money is saying, "Okay, we have we've we've upgraded these stocks to these ridiculous price targets which help us unload. It creates exit liquidity, and we can unload, and we take that money and we rotate it to what hasn't run. And then we spin the narrative to start saying, "Oh, those stocks are overdone. They're they should bounce up." Then they make money there. I mean, this is how the institutional game is played. And it's what I always try to do for you guys is trying to let you guys in or pull back the curtain on the institutional games. Again, the institutions don't like me for doing this, but again, I do my best to just give it to you straight. And at least what I'm seeing, right? Whether I'm right or wrong, that's what I'm seeing. Again, 27 years of analysis and working with institutions has shown me a lot of these things. So again, Teams, uh, Asana, Microsoft looks good, Adobe looks good. And then what I what I'm looking to do is I I think ARM ARM here is this. They make chips. By the way, this stock is up from 200 to $360 just in a week or so. I think this one is a pullback candidate. Same kind of thought process. This is a chipmaker. I think these are the ones that you're going to see a pullback on. uh like we are already seeing on Nvidia uh like we are already seeing on um on Intel um and light and I think Tai uh Taiwan Semi is beginning that same process here off of this trend line. I mean look at this run on Taiwan Semi just sit from one year ago was $134 stock. It's now over two trillion I think market cap on this. All right, so that's where we are at this point guys. I just wanted to give you my latest analysis here. There's a lot of other software AI related plays that are beaten down. I only went over a few of them here, but for me, I'll be all weekend doing research to find these names that that are still kind of close to their 52- week multi-year lows. I think that's where you look for money rotation. I think you also see probably as oil has come down here, um, names that have been beaten down due to the consumer will have a bounce because the idea is lower gas prices will help the consumer spend a little bit more in other areas. So, there's some real good opportunities here. Have a great rest of your day, guys. Thank you so much for tuning in. I'll talk to you soon. Take care.