Technology bulls started the week on offense as Wall Street analysts continued to pound the table with new bullish calls, states Jon Markman, editor of Strategic Advantage.
The gain for the benchmark lifted the NDX well above 15,296, the rising 50-day moving average. Bulls can thank Wall Street investment analysts for helping take back that key marker.
Analysts on Friday recommended shares of Apple (AAPL), Adobe Systems (ADBE), and Snowflake (SNOW). And researchers at Morgan Stanley told clients on Monday to buy Tesla (TSLA) shares, touting the potential for a rally to $400. The centerpiece of the Morgan recommendation is that Dojo, Tesla’s AI computing platform could radically transform transportation.
Dojo is a supercomputer that uses Nvidia (NVDA) AI processors to inform autonomous driving software. Tesla shares closed Monday at $273.58, a gain of 10.1%. The hype surrounding AI has faded a bit since the Nvidia blowout earnings report in late August. Although business at Nvidia is accelerating, other technology firms have been unable to reproduce similar momentum.
Executives at C3ai Inc. (AI), an AI application developer for enterprises, announced in August that sales fell well short of expectations. And Oracle Inc. (ORCL) reported after the close on Monday that first-quarter revenues missed expectations on slower hardware and legacy on-premise, software licenses. Sales from cloud infrastructure rose to $1.5 billion during the quarter, up 66% versus a year ago. Larry Ellison, chairman, touted $4 billion of orders in the pipeline, yet Oracle shares fell 9.2% in after-hours trade.
Bulls will faced an important test early Tuesday as they digested the Oracle results while coming to terms with the barrage of positive analyst chatter around other AI stories. The stronger closing on Monday helps.
There is now support for the NDX at 15,462. Overhead resistance is 15,619, the September 1 high.
Double Trouble: Our timing model remains bullish.
Members purchased on September 7 ProShares Ultra QQQ (QLD) at $63.50. The 2X exchange-traded fund closed Monday at $65.83, up 3.7% from the entry-level.
Now set up to sell the entire position at $71.20 and place a new stop at $64.13.
