Technology bulls could not wait to get started on Monday as the Consumer Electronics Show opened in Las Vegas, and big tech companies readied the launch of new products, states Jon Markman, editor of Strategic Advantage.

The Nasdaq 100 sprinted to 16,650, a gain of 2.1%. The rally for the benchmark recaptured most of the ground lost last week. It was also a stark reminder to bears that the themes that sent the NDX to a 54% gain in 2023 remain alive and well. Specifically, investors are all-in on the artificial intelligence story. The CES keynote address from Jensen Huang, chief executive at Nvidia (NVDA), sent bears into full panic mode. Huang is a gifted storyteller. More importantly, he has a long history of delivering the goods. 

Huang bet early and often on AI, reshaping a video game graphics business into the world’s most important AI ecosystem. That technology is now at the center of next-generation computing, and Nvidia is certain to play the leading role. Bears argue that AI can’t possibly be as big as Huang lets on. They are missing the point. Stock prices are not always rational. Valuations are governed by emotional factors such as fear and greed. 

Huang says AI chips will become the brains that run all computers, a complete reimagining of the industry. This means all new hardware. Nvidia shares rallied Monday to a record high, up 6.4% to $522.53. Shares got a new $700 price target last week from Bank of America analysts. Other investment research firms are certain to follow. Bears don’t want to be short, and professional investors fear missing out on another big move higher. There is a small gap for the NDX at 16,758. 

Bears are certain to concede a rally to that level in the early part of this week. If bulls blow through that resistance point, the next important marker for the benchmark is 16,969, then 17,300. Keep in mind that CES is a promotional venue for tech companies. Executives are there to say good things about upcoming products. This show can be an accelerant for rallies. The bulls will keep punching. The tape can get out of hand quite quickly. Key support for the NDX is still 16,167. Be ready to buy that pullback.

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