AI Stocks Lead Market Bounce Into Huge Earnings; ATI, Micron, Datadog In Focus

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0:40Good afternoon, everyone. It's Alyssa Coram and Ed Carson here with a look at the stock market today for Tuesday, July 21st. And we saw a big bounce today, Ed, led by an AI recovery ahead of some pretty huge earnings this week. Yeah, big earnings coming up. But I want to take a look at ATI, Micron, and Datadog. All right. Some notable things to discuss there. We'll check out those charts. But first, as always, a closer look at the major indexes. We're going to kick things off with a look at the S &P 500, represented by the VOO ETF here, up nine-tenths of a percent on the day. Meanwhile, the NASDAQ had a stronger day, but in a weaker position.

1:25The NASDAQ composite up 1.3 % on the day. The NASDAQ 100 also had a strong session here, Ed, with the focus on tech today. The NASDAQ 100 up 1.9%. The Russell 2000 also had a good day. IWM up 1.5%. And blue chips positive on the day. The Dow up about 7 tenths of a percent or so. So the S &P, it's right at those moving averages. Yeah. So, yeah, S &P back above the 50-day and 21-day lines, still below those short-term levels. So we'd really like to see it get above that, especially given the volatility that we've had. You know, we want to see that we're not in this chop fest where a good day or two means a down day or two afterward, as opposed to the uptrend kind of mentality.

2:21and we have so many big earnings and so much news out there that adds to the risk that you could have some up and downs. But, hey, it's nice to get back above these levels. You know, while AI led, there was a lot of strength out there, you know, really. And with oil and with treasury yields rising, I mean, you know, there was a lot of headwinds in the market. I said, no, we're going. We're going. So it doesn't mean that maybe tomorrow that may not occur. But those were, you know, pretty decent moves on both of those things and headwinds for the market. And the market said, no, we're going to go.

2:52And so that was positive. Yeah. And here's a look at the RSP. Hanging on around that 21-day line was a little weaker than the S &P 500 today, which we know it is over time. This uptrend, though, is still intact. OK, so that's a look at the S &P. let's take a closer look at the Nasdaq composite because this is a good proxy for a lot of the stocks that us growth traders like to trade with that tech bent we're still below the 50-day line and that has now flatlined you mentioned the recent highs so we do have that level to keep in mind as well as the 50-day 26 ,000 that round numbered there and the 21-day line will that be resistance or can we conquer that level?

3:41Also want to mention, Ed, I was doing a little studying of the late 90s, looking back at the NASDAQ today, since we do some of that precedent analysis here and there. We've talked in recent shows about, in recent weeks and months, how that was a choppy period when you look at the day-to-day, you know, parts of that uptrend, right? But then you take this step back and you think, wow, the late 90s, we were rocking and rolling. And I think one thing to note there is even with the chop, we continued to make higher lows the whole way. So I think that that's also something for traders to keep in mind is we could continue to see a choppy uptrend.

4:25We could chop higher, you know, and see the leadership baton handed off from group to group. But can the market continue to make those higher lows. Yeah, and it has done so far. It's come close to undercutting, but it has not. And it's interesting, the NASDAQ had the strongest or maybe they were essentially the strongest action today. It was the only one that really didn't prove anything. Everything else went above some kind of average. I guess it went above the 10-day line, but honestly, that's just not enough. Yeah, we need to get above these levels here, the 21-day, the 50-day line, and then the short-term highs.

5:02Get above all of that. David dude, Ryan made some really good points about how the NASDAQ and a lot of leading stocks coming up to their 50-year line. And some of them actually peaked above. But you want to see it decisively. And, you know, just that because this is also where you could just roll over, you know, you could come up to those moving averages and then roll over. So this is not the challenge. You know, we haven't, you know, really hasn't done yet. Google earnings tomorrow is sort of the start of that first massive earnings. And it's not so much the earnings or even the guidance, It's the capital spending outlook that is so huge.

5:35And then we'll get all the other big hyperscalers next week. But that's why Google is just far more important than anything else this week, even though there's some really big reports. Yeah, so that's just going to be really important to see how it does. If NASA can blow through those things, yeah, we could be another thing. For the first time, we'll have had some kind of space to form bases. Unfortunately, it's been so volatile, the bases are often choppy. But there will be things to buy, things that you were like on the edge with, you know, you can finally maybe those core positions can then continue to move higher.

6:11But, yeah, it's a really important time through the next through next Thursday, I'd say. Yeah, because we will have to see what the reaction is like for a lot of these hotly anticipated AI reports. I think investors will have some knee jerk reactions when we see some of the CapEx guidance. Will, you know, will it be good, bad or ugly? We'll have to see mixed bag, what the general consensus is and what the ripple effects are across the AI ecosystem. So I know you are all over it. And as our news editor, as well as the tech team, we're going to be covering it on this show and IBD Live as well. So a big couple of weeks.

6:52Absolutely. Okay. Let's get quick thoughts on blue chips and small caps. Here's a look at the Dow. Wow. Both of them went above their 21-day lines, and that's nice. It's good to see. They're not that far from highs. I mean, this is also just showing you don't have to be just the Nasdaq. There's a lot of parts of this market. I mean, RSP didn't do that much, but it got above its 21-day line. It's pretty close to highs. So, you know, it didn't have the big wow day, but also it hasn't had the big ouch days in that same way. So a lot of the market's doing well, and, you know, some of the stocks that are flashing buy signals, for the most part, are really not in the AI sector right now because they've been hit so hard.

7:31Yeah. And ATI, one that we will look at. All right. Let's take a look at some sectors before we move on. Ed, SMH doing some repair work here up four and a half percent. But we have that 50-day line still to conquer here. Yeah. I finally got out of this last week. And that's, you know, that's OK. I wish I'd had it still now, but we'll see how it goes. Just like the NASDAQ needs to get back above the 50-day line decisively. And, you know, you can always buy it back, right? If it does make that decisive move. Absolutely. I mean, I bought it at the time because I wasn't sure what to buy. I think there might be more things to buy, but I'll definitely consider buying SMH in part because it's ATR, while it's up at 5%, it makes big moves like it did today, but it's not 10%, 12%, 15 % like some of its components.

8:21So there's something to be said for that. Exactly. Great point there. Okay. IGV software are still in focus as well. What do you make of what's going on with software? I mean, software in general still has a lot of work to do. But it was interesting that some of the leading stocks fell back. Now, some of that was just constructive. This sort of depends. And we'll talk about it with Datadog. Okay. And then XBI, the biotech area, we saw a lot of money flowing there, notably in the mid-June timeframe, a pullback since then hovering right around a key level. But it still feels like there are a lot of biotech names that are holding up, holding strong, maybe extended, maybe presenting some add-on entries or even forging new buy points.

9:07I mean, this is why you don't buy after when things are extended and also why you try to find the early leaders. Because if you bought the early leaders, they kept rising and now you have a cushion in most parts. I mean, there's always going to be those that aren't. But if you bought some in the last couple of weeks, well, you might have had to sell or you're just like, oh, I don't know what I'm going to do with this name, even though XBI and a lot of those names look great. But just in general, when things are moving, you want to try to get on to them as soon as you can. Okay, let's take a look at an actionable or potentially actionable stock today.

9:38And that is ATI and the Aerospace Defense Group, up almost 6 % on the day, Ed, rebounding off of the 50-day line. Some nice support there earlier in the week. How's this all? Yeah, off the 50-day, off the 21-day line, breaking the trend line above short-term highs. Sort of a shelf, you could almost argue, toward the prior base, you know, that was sort of there. It's not really showing up, but you can sort of see that whole area there. And so, yeah, I think there was definitely action. This was added to leaderboard today. So, yeah, this one has shown strong growth. Um, it's been a, it's been a real winner, uh, over time.

10:18It isn't just like on, wow, amazing, but it's like, you look at the whole year and it's like, man, that's, it's sort of like when you jog for long distance, all of a sudden it's really impressive as opposed to sprinting and then taking breaks for long periods of time. This one just keeps on moving up. Uh, also note that CRS, which is somewhat similar, sort of specialty metals, very similar action today, sort of bouncing off the 10 week line, breaking trend lines. So, you know, that's nice to see in that regard as well. So, yeah, and CRS has earnings soon. But, you know, ATI just looking very strong.

10:52And I don't believe this has much AI. It probably has something because it's specialty metals or used in turbines or something because everything's AI. But this is more of an aerospace defense play. Fusion powers the sun and stars. General Fusion is working to bring the zero carbon abundant energy source to Earth. As global electricity demand surges, fusion has the potential to deliver clean, scalable power for a growing world. Proudly NASDAQ listed, General Fusion is the first publicly traded pure play fusion energy company in the world. With its magnetized target fusion technology and operational demonstration machine, General Fusion is advancing toward commercialization, targeting a first-of-a-kind fusion plant around 2035.

11:31Learn more at generalfusion.com. Interesting. Yeah. And contrasting that with CRS, I'd imagine one of the appeals for ATI today over the CRS is just with that earnings coming up soon, potentially, although who knows if that'll have an impact on ATI, the CRS earnings. But strong bottom line growth from both companies. And I think also maybe in terms of how extended the stock is, right? It does look like. Yeah, I think ATI is better. Yeah, I agree. ATI looks better because it's still in an uptrend, but not feeling as extended. But yeah, it's just nice to see some peers showing similar action. But it's always, you know, always try to pick the best one.

12:14And right now, I think ATI looks the best. Fusion powers the sun and stars. General Fusion is working to bring the zero carbon abundant energy source to Earth. As global electricity demand surges, Fusion has the potential to deliver clean, scalable power for a growing world. Proudly NASDAQ listed, General Fusion is the first publicly traded pure play fusion energy company in the world. With its magnetized target fusion technology and operational demonstration machine, General Fusion is advancing toward commercialization, targeting a first-of-a-kind fusion plant around 2035. Learn more at GeneralFusion.com.

12:47All right, and let's go on over to Micron. Are the memory plays making that big comeback? Well, they're trying to. MU up over 12 % today, and it did close above not only the 50-day line, but the 21-day line. So that is notable. and I could totally see some traders wanting to take a shot with this one today. It still is questionable, I think, in terms of just the severity of the decline and thinking about how bases form, right? Seeing it shoot straight back up to highs. Is it the most likely scenario? I'm not sure. It did go quite vertical pretty recently. So what are your thoughts on this one?

13:38Yeah, I mean, I'd feel more comfortable for a different time period. But yeah, I agree with everything you're saying. But what pushes me against not taking the action on it today was there's just Google is coming up and a lot of its peers are coming up. Seagate reports next week, not 100 % competitor, but it's in memory. That's right above its 50 day line. And then SK Hynix, which just came up, like, I'm not sure whether it is in Korea, where it's above a 50-day line or not, but in the U.S., it's sort of forming an IPO base. That has earnings in a week as well or so. So two big memory plays with Google and all the hyperscalers.

14:15There's a lot of risk. I mean, Micron could be up 30 % next week. I mean, over the next week. I mean, it would not shock me. Could it be down 25%, 30 %? Not really shocking either if the market, if those other things don't come in right. So, and it's even now, it's like on a weekly, it's still an inside week. So in a way, it hasn't really done anything. I mean, it's done something, but, you know, in a way, it hasn't really shaken off what's going on. So I think this looks the best of the memory plays. It was really positive action. I might have been tempted to make a mental health buy if it weren't for the fact that there's just so much coming in that could affect Micron over the next week or so.

14:56Mm-hmm. Well, we'll have to see what Google earnings are like. And I think just from the technical perspective, it does seem like a thousand, that round number. Yeah, that looks really nice. That could be a good area to look at. And then, you know, you manage risk. Yes. Is risk heightened right now? Yes. So you do have to be aware of that. But if this does fit your risk profile, have a stop, right? So we'll have to see how all the AI news impacts Micron and the other peers. Okay, moving on, Datadog, you wanted to highlight this one in the software space, still working on the right side of the base, right at the 21 day.

15:39Yeah, on a weekly, it already had a handle, but today it formed a handle on a daily chart. So it's a slightly different one because this is daily. On a weekly, it had a slightly different one either way. You know, it's as me as a non-investor, this all looks fine. It's setting up, it's pausing after a big run. It's sort of nice that it's doing this sort of longer. And I wish it were a little bit cleaner. Okay. But still, all in all, it's holding up reasonably well, reasonably tight, given all the kind of craziness out there. Yeah. The only thing is, if you bought the breakout, say, on the weekly chart, you know, you're down a fair amount.

16:16You're down four or five percent. This makes it tricky and just shows you how it is difficult to make new buys, even when the stock is still doing reasonably well. I mean, but if you bought, you know, when it poked out to sort of short-term highs last week as it did that breakout, now you're down, I don't know, 5%, 6 % getting into it. It's sort of getting into the sell zone area. So that's just tricky. And it just has to have to listen to that. And maybe this is definitely a situation where you might be forced to sell and then you can buy it back, you know, if it does work out. Because it's not like, I think this could definitely work.

16:50I think this stock could definitely work. I don't think it's broken by any means. In some ways, you could say it's almost constructive. But, I mean, it's just you have to manage that risk. And if the losses pile up, you have to listen to that. But definitely watch it. And this is one of the, a lot of leading software stocks had days like this. This one actually has a handle now after on a daily. So that'll be, in some ways, it's better than before. But, yeah. Yeah. And it seems like, Ed, if you're going to buy strength for something like this, when it did have that handle breakout, like you were talking about with the lower handle there, looking at the lows in the handle, right, maybe a decisive close below that would make it feel a little more broken or at least signal maybe it needs more time.

17:37Maybe it'll have a handle shakeout down to the 50-day. Who knows? But if you're buying it in that position, maybe size it to where you can withstand down to a decisive close below those relevant lows, perhaps. All right. So I couldn't see you. I was looking at the camera. I wasn't looking at your face. So, all right. Let's go to IBKR. Earnings out after the close. Fuse, I'm seeing a whole lot of movement in the stock yet. Yeah, it's wavered a little bit. It seemed, you know, beat Fuse modestly. It rose today earlier. Schwab reported. Schwab didn't really do much, but IBKR came in. So there's, you know, that.

18:21But IBKR sort of, you know, yeah, so that one actually reversed lower. It started off okay. But IBKR, it has an emergency. It's bouncing off the 50-day line. So you could have been doing all that, but it sort of came down abruptly. At the end of this week, it's set to have a flat base, assuming it doesn't break out or just have some massive collapse. So that's another way to be looking at it. So if it gets above these levels, this is just showing, you know, it's been acting pretty well. After that last breakout, it's been up and down, up and down. But the ups have been, it's consistently sort of gone up more as along the way, some pretty strong action.

18:55So, yeah, so this one is setting up not sort of seems in between the 50-day line and an official breakout. but one to watch to see if it can get above there, you know, whether it's tomorrow or in a week or so. Absolutely. And then you mentioned Google, so we can give that a little preview, though I know the actual detailed preview was with you and Lexi in earnings cheat sheet. Yeah, this looked a lot different over the last few days. I mean, it was setting up when we first looked at it, but there you go. Look, this one needs to get above the 50-day line. But the real issue is, and it could be that they say something, we're going to double our CapEx and that makes Micron and all those AI plays rally, but Google sells off.

19:38So it doesn't have to work where they're all together on this. But yeah, Google was sort of setting up as like, okay, maybe it's going to go on another run, but that was disappointing action. And this is when we talked about stocks or the NASDAQ running up to key levels and then getting turned back. That's happened a couple of times, maybe three times, you could argue with this stock. And it doesn't mean it won't work the next time, but And, you know, this is why we really look to see those decisive breaks above. Sometimes the worst time to buy it is just below a buy point or just below resistance because you're hardly getting any reward from cheating, but you have all the risk of cheating, you know, if you just wait a little bit.

20:19But yeah, this one's important. There's a lot of other names out there, but this one is just so impactful on the whole market. All right. Well, we'll see what happens. And speaking of having an impact on the market, we know SpaceX has quite a big waiting for such a young company. So just a quick look at the chart here, only because I guess you could say, hey, it snapped a seven-day losing streak. But we know the stock is not in a good position here, Ed. We were saying from the start how we wanted to wait for that IPO base. Never really formed anything. perhaps an aggressive entry momentarily that traders got stopped out of around that$161.70 level.

21:05But it's now below those first days of trade, as well as the IPO price of$135.00. The notable news here today is that we do have an earnings date now for early August. And so traders might also be thinking about the lockup expiration around that. Yeah, there'll be earnings on August 4th. And then there's a slew of lockups. And the first one is on August 6th. So there's different things. And some of it's based off of where the share price is. So it gets confusing. Yeah, this one has repair work to do. But we'll also see, I mean, how much will it move on earnings? I mean, they're losing money and they're doing this and that.

21:46And they're going to be getting some revenue. But ultimately, given that so much of the valuation is on what it's going to do or hopefully will do, you never know you know it'll be more like do people like what Musk has to say it's a little bit like Tesla which will be reporting tomorrow and so it's like sometimes Musk seems to say the same thing and sometimes the market likes it and sometimes they don't like it you know like it's the same kind of thing so it really will be the market reaction will they care about earnings we don't know it's the first earnings report will we care about will Musk wow them or will it be this way yeah so I think that's going to be really we're getting close enough to that that But, you know, you'd have to be, even if we rebounded, you'd have to really be wondering what's going to happen with that earnings report.

22:29Because the first earnings report in an IPO is just so, such a wild card. It sure is. Great thoughts there, Ed. Much appreciated. All right. Thank you. And that's it from us for today. We will be back with more tomorrow morning on IABDLiveInvestors.com slash IABDLive for all the details. So we'll see you then, everyone. and then we'll also see you right back here tomorrow after the close

23:10this show is for informational and educational purposes only and nothing should be construed as a recommendation to buy hold or sell any securities any securities and investment strategies discussed may not be suitable for all investors. Make sure to consider consulting with your financial advisor before making investment decisions. Fusion powers the sun and stars. General Fusion is working to bring the zero carbon abundant energy source to Earth. As global electricity demand surges, Fusion has the potential to deliver clean, scalable power for a growing world. Proudly NASDAQ listed, General Fusion is the first publicly traded pure play fusion energy company in the world.

23:45With its magnetized target fusion technology and operational demonstration machine, General Fusion is advancing toward commercialization, targeting a first-of-a-kind fusion plant around 2035. Learn more at generalfusion.com.