AI Stocks Lead, Blue Chips Lag In Down Session: AMD, Magnite, TVTX In Focus

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0:40Ken Shreve:Good afternoon, everyone. Welcome to Stock Market Today for Tuesday, September 8th. It's Alyssa Coram along with Ken Shreve here. And stocks getting hit today as oil prices are on the rise and the 10-year yield still in sky-high territory, you could say. Ken, your thoughts on where the market stands? What are we going to be talking about today? Well, yes, another strange day. We had the losses, a tough day for Blue Chips Alley, but boy, lots of big gainers again underneath the surface. So lots to talk about. Found three stocks to talk about, including a A very bullish day for advanced micro devices and semiconductor stocks in general.

1:26So we'll take a look at AMD. Also want to take a look at Magnite, kind of a lesser known advertising name, MGNI. And also Trevere in the biotech space, TVTX. There you have it. Okay.

1:44Ken Shreve:Three interesting ones to take a look at. We will get to those. But first, a closer look at the major indexes. we now have a two-day decline for the Nasdaq composite. Today's down day just three-tenths of a percent. Meanwhile, the S &P 500 down some six-tenths of a percent on the day, breaching the 21-day line here. So a notable move there. You mentioned the weakness in blue chips, so let's take a look at the Dow. Look at that. Down 1.2 percent, back below the 50-day moving average. And then small caps today turning lower, down about four-tenths of a percent, still stuck under some key moving averages, Ken.

2:25Ken Shreve:So we'll kick things off with a look at the tech-heavy index. Now, all of a sudden, does the NASDAQ look like it's in the strongest position, at least here in the short term? I mean, it does. It was a very mild decline for the NASDAQ today. And we had a day like this on the NASDAQ just not that long ago, late last week, where we had a lot of explosive movers in the NASDAQ 100. It was a lot of semiconductor stocks moving, a lot of AI stocks moving to the upside. And that was the case today. You know, the SMH definitely closed off its high today. You know, you see it moved nicely above its 50-day moving average, extended gains for the fourth day in a row.

3:20SMH was up 2.4 % at one point today. It closed higher by a little over 1%. So, the chip stocks faded a little bit off highs by the close today. So on the surface, you know, NASDAQ composite really didn't move a whole lot today, just a mild decline held above its 10-day moving average. So after that big gain on Thursday, you know, two down sessions, it looks like we're going to get a distribution day today on the NASDAQ. Had a very mild, down, low-volume session on Friday ahead of the three-day weekend. So it's a pretty easy volume comparison, pretty easy for volume to come in higher than Friday today.

4:10So we'll get higher volume on the NASDAQ today, and it will be a distribution day. But we're still holding above short-term support level, so not a decidedly, bearish day by any means for the NASDAQ, but a lot of really explosive gainers to the upside underneath the surface today on the NASDAQ for sure.

4:33Ken Shreve:Yeah, I'm really excited to look at AMD soon. I want to go to blue chips, talk about that a little bit more. What was the catalyst behind the decline? Was it sort of one of those AMD's gain is NVIDIA's pain or what can we take from the action here today? Well, Salesforce CRM was a big decliner and software stocks were a big sore spot on the NASDAQ today. So IGV extended losses for the second straight day. It was a 1.7 % decline for software stocks today. So Salesforce was a big decliner. That was a pretty sharp drop for Salesforce in the Dow Jones today, but it was really Amgen. AMGN was the big decliner in the Dow today.

5:25You can see that was a bad drop there, but that was down more than 10%, I think. And the story here was sort of a drop in sympathy with Novartis, N-V-S. And what happened was Novartis had bad news about an experimental heart drug. And what happened was, I have to check my notes here, but Novartis had an experimental cardiovascular drug that did very poorly in a late-stage trial. And how this affects Amgen is that Amgen has a very similar drug that is also about to give a phase three trial reading that has essentially the same profile as this Novartis drug. So it's just not looking good that the same readout that this Novartis cardiovascular drug gave, it's very possible that the Amgen drug is gonna give a similar readout.

6:30So we don't know for sure, But since both drugs have a very similar profile, it's likely that Amgen's drug is probably going to give a similar readout. So the Novartis cardiovascular drug, it lowered the bad cholesterol, but it did not lower the risk of a cardiovascular event. So there's fear that Amgen's readout could be similar to what Novartis read today. So that fueled a big drop for Amgen in the Dow. And that is what, you know, Amgen being a$393 stock, this is one of the higher priced stocks in the Dow. And since the Dow is a price weighted index, this was a big negative impact on the blue chip index.

7:18And then, you know, of course, Salesforce got dragged down with all the software stocks today. So blue chips has a 600 point drop thereabouts for the Dow today. And that's, you know, that dropped through the 50-day moving average. So quite a technical no-no for the Dow Jones today.

7:37Ken Shreve:Yeah, it really did have that notable violation there. And of course, NVIDIA not moving the needle the same in the Dow, but it did have a notable decline today, down about 2.1 % moving in opposite directions from NVIDIA. But I do want to analyze the technical action for the S &P 500 a little bit closer. Ken, what do you make of this move back below the 21-day? We do still technically have a power trend here, but I think it's been difficult for investors to find the power or the trend. Yeah, well, I'm going to try to put myself in our senior market strategist, Mike Webby's feet here. And I don't think he'd be thrilled to see the S &P 500 close underneath the 21-day line here.

8:34But the full story hasn't played out yet. We're probably going to get a distribution day on the S &P 500 as well here. So to see the S &P give up the 21-day line today, I mean, it wasn't a violent drop below this key support level. So we'll just kind of see how the S &P trades for the rest of the week here. We'd like to see it ultimately kind of test and hold the 21-day line this week. It's still possible it could just kind of firm up there and find support in the coming days here. So we'll see. But, you know, we'd like to see it hold support here. So NASDAQ is still kind of firming up at short-term support levels.

9:21S &P is still kind of testing support here. So it's going to be a mild distribution day for both indexes here. You know, so it wasn't a violent day of selling on either index today. But, you know, in general, a day of outperformance for chip stocks, a day of outperformance for AI stocks, absolutely. And, you know, software stocks went in the opposite direction. So chips outperformed, software stocks lagged. And, you know, that spilled over into the S &P 500 a little bit. But, again, just a little bit of a close below the 21-day line, but nothing too alarming.

10:05Ken Shreve:Okay, well, what about small caps? Still below the major moving averages here, Ken, although we are close, but your thoughts on how small caps are shaping up? We do know the different forces at play here, some of the different forces at play here for small caps. What's your assessment? Yeah, this is just looking like a tired index as well. I mean, we're dealing with what is likely a higher interest rate environment. It still remains to be seen. I think the market is leaning towards a rate hike coming up at the Fed meeting. It's not a slam dunk by any means. It's probably about a 60 % chance that the Fed is going to move up by a quarter point at the September 15th, 16th meeting.

11:04And so small caps, you know, maybe bothered a little bit by a quarter point hike. But the small cap index is starting to live underneath that 50-day moving average. So it's starting to look like a laggard index. And now with the Dow below, you know, with that move below the 50-day moving average, both small caps and blue chips are starting to lag the market here a little bit. So, you know, it's just that both indexes are lagging here, not the end of the world. I think we, you know, with the NASDAQ and the S &P 500 still, you know, holding above their 50-day lines, you know, we're still fine here.

11:42But small caps are lagging, no doubt about it. and starting to live below that 50-day line. So we'll just continue to monitor here. But again, we're still in an uptrend here. Our invested percentage is still fairly healthy at 60 % to 80%, I believe. So overall, action in individual stocks looks pretty good. Market is still a little bit tricky here, But, you know, overall, a lot of good action underneath the surface here today. So, you know, overall, things are still looking pretty good, I would say.

12:24Ken Shreve:This podcast is brought to you by Altana AI. Altana's AI brings governments and businesses into one trusted network. So compliance gets proven, enforcement gets smarter, and goods move faster across borders. Learn more at altana.ai. Altana. Okay, we'll take that. And we did talk about rising oil prices. So let's go ahead and take a look at the chart of USO here, Ken. Now back to the highest levels in a couple of months at this point. So I guess maybe one would think that stocks could be under even more pressure than they currently are with this type of action. Or are investors getting a little bit more used to the idea of just higher oil prices for a sustained period?

13:16Yeah, I think the NASDAQ's and the S &P 500's performance today was even more impressive with the fact that oil was up like it was today. And we still have this upward pressure on interest rates. There's talk that it's only a matter of time before WTI is going to get to$100 a barrel. I think we're still in the low 90s right now at this point. And if we do keep marching towards 100, I can't believe that's going to be good for the market. So we'd want to see oil eventually start to calm down here. But I think the market overall performed pretty well today since we had another upward move in oil today.

14:11And again, that 10-year treasury yield is certainly stubborn, staying high where it is. Zero TNX, let's see, I know the 10-year yield is...

14:23Ken Shreve:It's up there. Yeah, it's just kind of staying sticky right around 4.8. So, yeah, so to see the NASDAQ and the S &P 500 holding where they are here, I mean, I think we still need to be positive. But this is, you know, again, higher oil prices and higher yields is still a formidable headwind here. So, you know, I have to keep an eye on it for sure. Absolutely. And one other chart adding to our picture here of what's going on in the market. Look at this can RSP. Now this is a little concerning. Down 1%. First close below the 50-day line in quite a while. This has just been trending so well since that April timeframe fell out of its regression channel last week.

15:20Ken Shreve:But this looks like I think if Mike Webster were here, he would say that now that that regression channel is indeed broken with today's move lower. Yeah. Yeah. I noticed the same thing. And, you know, the QQQE is not looking too much better. That also went below its 50-day as well. But RSP, like you mentioned, it's been a long time since RSP has been below the 50-day moving average. QQQE was below the 50-day not that long ago. So overall breadth, it wasn't more than 2 to 1 negative on both exchanges today. It was less than 2 to 1 negative on both exchanges. So, yes, this is a concern for RSP today to see it gap below the 50-day, no doubt.

16:19So, you know, we've got some headwinds that we're dealing with today. But again, we saw a day like this late last week where we saw, you know, when you go through the NASDAQ 100 and you look at all the up stocks, There was no shortage of 3%, 4%, 5 % gainers in the fiber optic space and the semiconductor space. There were a lot of big movers today. Now, a lot of these stocks were moving after correcting sharply in price, and some of them are trying to get back above their 50-day moving averages. Some made very bullish moves today, so saw some very bullish action in large-cap tech. So, you know, seeing some good action here, and we'll take a look at AMD.

17:09And, you know, there were some—

17:10Ken Shreve:Should we do that now? Yeah, sure. Okay, let's go there. Take a look at AMD. Go for it. Up almost 6%. Yeah, I mean, this was not the exception today. We saw a lot of bullish moves in some institutional quality names like this. And we saw volume pick up the pace. So, in fact, we could probably take a look at some other big NASDAQ 100 movers that made some bullish moves. But this was, you know, volume was picked up the pace from Friday for AMD. It was a gap up. It closed up near its high, took out that round number of 500. So it kind of broke out of a little downtrend today. today. So this was just a very, very strong move for AMD.

18:04I think it was an aggressive buy for traders. I was not in the mood for buying AMD today, but you have to respect the move that the stock made today, no doubt about it. So it was just there were big buyers in the stock today, And it was, you know, this was a very typical move in large cap tech. You can look at a name like Intel, you know, Intel, a group, you know, same type of stock, the same type of thing, you know, gapped up over the 100 level. Volume picked up the pace in Intel, too. So you definitely saw some, you know, big money moving into, you know, some of these large names. And, you know, again, it was just inside the NASDAQ 100.

18:56A lot of your large cap techs were really on the move today.

19:00Ken Shreve:Yeah, it does seem like there are pockets of the AI space. Lighting back up. Lumentum, another one, up 11%. Bloom Energy, you know, this one was featured on IBD Live this morning. Look at that. Up 9.6%. And with AMD in particular, the catalyst being the CFO at a conference saying the total addressable market could hit, what,$3 trillion by 2030, up from an estimate of$2 trillion just in July. So that's a pretty big increase there in the outlook in such a short period. So perhaps a catalyst for the broader AI space. But it does seem, Ken, like investors do still need to be discerning with what they are trading in AI.

19:52Ken Shreve:We're past that, you know, rising tide lifting all boats period. Like we, I don't know, maybe it's back on. Maybe today is the first step in that being back on. But we're not, the jury is still out on whether, you know, we can get back to the kind of market environment for AI that we were in, in that April, May timeframe. Yeah, the jury is still out. I don't think you can look at a day like today and just say the coast is all clear. You can look at a day like today and say, I mean, a lot of your memory stocks made good moves today. Micron reversing. Yeah, made a good move Friday. So here again.

20:42So some of these, they made some nice moves early. SK Hynix made a nice move today gave back some of those games I've been following DRAM this is the memory ETF that tried to pop over that recent high of 6205 it kind of came in and gave back some games even NBIS the NeoCloud the data center operator NBIS that you know so you saw a lot of money flow into a lot of these AI data center operators. So very, very interesting day. But again, two days of strong gains in this stock. Is it viable right here? It just still looks like it's a little bit out of position here. So you want to keep an eye on a name like this and some of the other NeoClouds, but just kind of want to just watch them trade for a little bit and see how they end up basing out here.

21:43So we're kind of in an interesting time here. But you want to be careful. You don't want to be just kind of haphazardly buying and saying, well, you know, AMD is ready to run and ready to break out to new highs here. You know, just got to be careful. More and more, athletes are using AI to help achieve at the highest levels. And the same AI tools are helping boost outcomes for leaders and entrepreneurs. To learn how AI is helping build winners on and off the field, search for AI that means business wherever you get your podcasts.

22:16Ken Shreve:Exactly. So with something like this, right, the 50-day line, you know, maybe you're going with a smaller position size. Yeah. Stop being either the low of today or a decisive close below the 50-day line. But it is very interesting to see that the CFO said they believe that the AI super investment cycle still at the very beginning. So interesting stuff there, Ken. Let's go to MGNI. Magnite setting up here. We had a gap up on earnings earlier in August. And it's still holding up really well after that big move. Yeah. So this is basically a sell-side advertising platform for content creators, online content creators.

23:12And they basically sell advertising. So this is sort of the new way that content creators are kind of selling their advertising. And they're basically the opposite of TradeDesk. They don't compete with Trade Desk at all, but it's basically a sell-side advertising platform. But the numbers are very, very good here. This is a stock that gapped up on earnings a few weeks ago. And again, a stock that just kind of moved sideways and is consolidating right near its 21-day moving average. Here's the weekly chart, consolidating. Here it is. Yep, there it is consolidating right at the 10-week moving average.

24:00Been consolidating for about five or six weeks here. So just like the setup here on the weekly chart here. So last week it really, really jumped. But kind of holding tight this week here. But it's a nice little base setting up here. But again, another stock that soared recently on earnings and is doing a good job holding onto these gains. The earnings report from a few weeks ago was really, really strong. A company on a nice growth trajectory. It's a mid-cap stock. The market cap is about$3.5 billion, but just really like the growth here. Pretty decent top-line growth and a company that not a lot of people know about.

24:45But in this advertising business, this is kind of a modern-day advertiser and just really, really seeing a lot of nice growth here. And built the right side of this base here and really trading well after a really strong earnings report. So I think this one is still could be in the early stages of a move here and good fund sponsorship and, you know, has a lot of positive qualities here, Allie.

25:20Ken Shreve:Yeah. All right. Well, I agree. I think that acceleration is notable on both the top and bottom lines and most recent quarters, a couple of those. And that expansion of the RS line and its moving averages, we like to see that in leading stocks. And I think that the recent highs, around 26 coinciding with the prior highs from about a year ago, makes this weekly chart look quite interesting as well. Sitting right there, sitting right up near highs. Sitting right there, sitting pretty. Let's go to TVTX in the medical sector. This is a profitable and revenue, well, maybe not the profitable recently, but it's revenue generating, Ken.

26:05Ken Shreve:and we're seeing some tight action on the weekly chart. And talking about expansion of the relative strength versus its moving averages, this has been outperforming the broad market for a couple of months here. Yes, yes. And they have their main approved drug. They're going to turn their first profit next year in fiscal 2027. So, Phil Spari is their approved drug. So this is a kidney treatment. It's meant to preserve kidney function in patients. But Trevere is an outstanding company. What I like here is this gap up on earnings and then this nice reversal at the 21-day line today. So this is just technically a very, very healthy stock, and it's just got the top-line growth that it's been producing in recent quarters.

27:04Again, it's losing money right now, but it's right on the verge of profitability. So again, Phil Spari is their main marketed drug, and very, very strong technicals here. I think today's upside reversal at the 21-day line was certainly a spot where people who own the stock could have added to the position today. But it was just good, strong technical action for the stock. On a day when a lot of biotechs were not really trading all that well today, healthcare stocks generally lagged today. It was not a great performing area of the market. So Trevere actually bucked the trend a little bit today.

27:52I see biotechs were just under a little pressure for most of the day. But Trevere bucked the trend. And this has been a mainstay in the IBD-50 for a long time. I'm pretty sure it's still in the IBD-50, but it's been in the IBD-50 for quite some time. Still technically very strong, great relative strength line. And yeah, really, really solid name in the biotech group here.

28:21Ken Shreve:It is. Okay. So with this kind of action, in terms of an entry here, Ken, do you use a three or four weeks tight entry or how would you be looking to get into this one? You know, I think you had an aggressive entry today off of the 21-day line. I think you could have entered the stock today. But if you want to wait on the weekly chart, you can just wait. Again, you've got some tight weekly closes here. So you could wait for a little mini breakout. Or you could just wait for just a touch of the 10-week line. Just wait for a test or a touch of the 10-week line. And I think the stock is in pretty good position, you know, right now.