Taking a Breather After a Strong Rally
Daily SPX Plan and Levels for Friday, August 7th | MU, NVDA, AVGO, and other Megacaps Included
The SPX traded in a narrow range, respecting the daily levels shared yesterday. The 7,745 central daily level acted as anticipated resistance signaling weakness since yesterday. From there, the index moved sideways down to the first daily support at 7,697.
Energy prices surged today since markets faced a renewed wave of caution as geopolitical negotiations hit temporary stops (as anticipated during the weekend, Geopolitics is the constant question mark in the market today). On the other hand, economic data showed this morning a slight rise in weekly U.S. unemployment claims, tomorrow the July employment report will be released early in the morning.
Opening reversals remained a theme today. MU recovered from an initial -4% premarket drop to close down -1.3%, offering another good example of a squeeze from oversold levels at the opening. This pattern aligns with the examples posted in yesterday’s educational piece on combining Bollinger Bands with S/R timeframes for paid subscribers.
Similar bounces occurred in SMH and AMD. However, these semiconductor names still have work to do to reclaim key moving averages on the daily and weekly charts, not to mention key monthly levels for MU and AMD.
From the stocks we’re monitoring closely this week:
UBER: Acted constructively, reclaiming its central weekly level (CWL) at 69 and closing right at the central monthly level, with a favorable weekly setup as of now.
SHOP: Danced around its central daily level of 146 while a major gap below leaves room for consolidation within a broader bullish context.
NVDA: Showed indecision, facing rejection at the daily resistance of 222 and retracing to the 219 central daily level (both anticipated last night). It is set to open under pressure tomorrow below the updated bullish above / bearish below central daily level (updated below).
MU: Attempted to recover its central daily level of 901 after bouncing off 826, both precalculated levels shared yesterday. The price remains under pressure below the central monthly level and must hold above 873.9 tomorrow to maintain a constructive outlook.
Today’s Agenda:
Let’s examine the most important chart of the moment to evaluate how the week is looking.
Daily plan and levels for the SPX
The daily levels below also cover critical semiconductor names (MU, NVDA, AVGO, TSM, and SMH) essential for the broader market rally, alongside megacaps that reported earnings this week: AMD, LLY, MU, SHOP, MELI, UBER, APP, and SPCX, which is looking constructive relative to its levels considering today’s +6% bounce.
Let’s begin.