Bounce Continues But Magnificent 7 Sit Out; Comfort Systems, Intel, Nebius In Focus

20:06Justin Nielsen:OK, great thoughts there, Justin. Next on our list, we want to take a look at PAVE. Thematic infrastructure ETF here. Is there any sort of AI bent to this at all or?

20:22Alissa Coram:There certainly is. Yeah, it's well, AI is in everything now. You know, right? It's hard to. Caterpillar is an AI stock, right? Caterpillar is an AI stock, you know. You know, again, it was it was one of those things where even utilities were, you know, turning into AI plays. So it's yeah, it's one of those things that you just have to be aware of. But, I mean, if you look at PWR, which, again, anything having to do with power, you know, very big there. But this also does have other areas. Nucor that we just went over, NUE, that's also in the infrastructure here. You've got your Rails, CSX and UNP that are in there.

21:01Alissa Coram:And, you know, those, you know, there's been a kind of interesting look to a lot of transportation stocks. So IYT has been an area of interest. Trucking, another area that, you know, has been doing well despite oil coming up. So yeah, PAVE, just another one that, again, it has a little bit of, you know, the AI infrastructure, but a little bit of these things that are outside of AI too. So a fairly nice mix. And again, just go through the top holdings there. You can go to the GlobalX website and they list them all. And you can also get a sense of if there's any stocks that are particularly dominant in the ETF.

21:39Alissa Coram:ETF. So in this case, your top stock PWR, Qantas services, is only 4 % of the net assets. So this one is a lot more spread out as opposed to if you look at something like XLE, for instance, and you see, oh, 20 % of it is in, you know, Chevron and 20 % is in ExxonMobil. So it's really dominant by those two.

22:02Justin Nielsen:Exactly. Okay, well, let's see how the chips did this week. We know this has been The leading area got hard hit last Friday, got caught up in the volatility, but it's already back above Tuesday's high and Friday's high. Right. So, yes, that's impressive to see. And for the week, let's take a look at the gain. Look at this, Justin. Chips, its leading area up 8.8 percent this week.

22:30Alissa Coram:Yeah, it's kind of like what pullback, right? So, yeah, just spitting distance away from new high territory. Again, the things that are getting above those Tuesday highs, above those Friday highs, I think are of particular interest. And also keep in mind, SMH, you know, that's the ETF. There are some high flyers in this. We went over a number of them, you know, but there are a lot of chips that are well into new high territory. Really just didn't stop at all. Um, let's just, you know, we, we, we took a look at a few of these before, but LRCX, um, you know, that one is, has been just looking very strong.

23:09Alissa Coram:Um, I think, uh, Rachel, Rachel and I went over this early in the week. Um, you know, it was already, you know, look, looking strong and here it is, you know, getting even stronger, uh, KLIC, uh, that one, you know, also, uh, right there in new high territory. And then you've got some of these that kind of, um, have been bouncing arm, uh, for instance, That one has been looking good. So, yeah. And then, of course, we also have another chip stock that we're going to talk about in just a little bit when we get to stocks.

23:38Justin Nielsen:Yes, we sure will. KBWB. This is the next ETF on our list, Justin. So, bank stocks making a run here.

23:48Alissa Coram:Yeah. So, whether you do KRE or KBWB, I like both of these specifically on the banks a little bit more than XLF. Um, but yeah, uh, you, you had a breakout already on these. You really didn't see a pullback here with the, the June 5th destruction. Um, actually they, they held up very well and now you're seeing kind of a follow-up move. So, uh, this is an area I think to, to keep an eye on. And then KRE is something that, uh, leaderboard has, has put on. And, uh, I think they increased their position on that today. So they had put it on previously, increased their position today. So looking, looking very solid there.

24:25Alissa Coram:So, again, we've covered a lot of areas outside of AI, within AI and outside of AI. So, again, we're seeing some breadth and a lot of setups in these individual stocks. So, even if there is a little bit of weakness, maybe more than we'd like on the indexes, the S &P 500 and the NASDAQ, we're still seeing strength in RSP, QQE, IWM. IWM. And so let's not, you know, let's not throw the baby out with the bathwater here. Let's let's look at the strength where it is and especially in the individual stocks and ETFs as well.

24:57Justin Nielsen:OK, well, before we take a look at the three stocks that you wanted to highlight, Justin, I think we also want to take a look at the SpaceX ETF since it did debut today. We'll Priced at 135. You read my mind. Yeah. Priced at 135. Opened around 160. Finished at 160 after making its way all the way up to north of 175 intraday. But the IBD strategy that we've been talking about is to wait for an IPO base. Wait for some sort of pattern. It could be a short one, but some sort of pattern to trade off of. We know that this is a highly anticipated IPO. Meta's IPO was also highly anticipated back in the day.

25:49Justin Nielsen:Cerebris, more recently, highly anticipated. I think even Snap, you know, when it debuted, highly anticipated. You can have these highly anticipated IPOs, but that doesn't mean that they are going to only go up once they list on the public market.

26:08Alissa Coram:Absolutely. So you have to be very careful. And again, it's very hard when you have no pricing history information to make decisions on, OK, where am I going to manage my risk? So, you know, at least you have to look at the intraday to kind of get a sense, you know, have a few bars in there. You know, I know, you know, I had a brother-in-law that was saying, yeah, I was buying it at 150 because I just, you know, thought it was going to go up. And I'm like, OK, well, good for you. It did. But, you know, how would you have managed your risk? You know, oh, if it went below 135, what do you do at that point?

26:43Alissa Coram:Now, at least, I think you had this kind of flat area that it created around 165, 167. It kind of came out of that. But, you know, here we have a pullback. And look, there's a lot of times volatility is you've got a lot of kind of jostling back and forth. But again, when you step back to just the one-day chart at this point, it's just one bar, very hard to manage your risk with a bar that wide. Certainly, if you were a little bit late to the party today and you were buying at 175, this was not a fun close for you. So as much as you might be looking at, oh, gosh, this was a 20 % move, not everyone got that 20 % move.

27:26Alissa Coram:Some people could be down considerably on this just on day one. And look, if this comes in a little bit more, then what do you do? So be patient. There's going to be plenty of time. If this is going to be the next best thing since sliced bread, there's going to be plenty of time to make money off of it. And again, ways in which we can manage our risk a little bit better once we have some, you know, trading history to it.

27:51Justin Nielsen:Exactly. You know, let's see how things digest over the next couple of sessions. We could see some early alternative pivots develop. We don't have to wait for it to cross 175 necessarily to take a stab at this one. But yeah, having some sort of level that we can trade off of is always a good thing.

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28:22Alissa Coram:I'm Telus Demos.

28:23Justin Nielsen:And I'm Miriam Gottfried.

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28:37Justin Nielsen:Okay, let's take a look at some stocks with trading history. And here's a look at Fix. This is Comfort Systems up 1.9 % on the day after a nice bounce off of the 50-day on Thursday. today. So this is in the AI theme on the construction side, but a very steady stock and powerful fundamentals here as well. Yeah.

29:03Alissa Coram:And really a lot of what they, I think, are into is the HVAC systems, cooling. So again, very AI related. And you can see, again, you have a very easy way to manage your risk on this one. You got a strong bounce yesterday, a nice follow-up today, and you've got this level where you know where you're wrong. You know where your thesis is wrong. And again, I do have a position in this myself. We put it on, oh no, I don't have a position. Swing Trader has a position in this, and Leaderboard has a position in this. I had to sell it because of our restriction rules. But I am looking at getting into this one myself, so maybe tomorrow.

29:44Alissa Coram:We'll see. Maybe Monday. Let's take a look at the weekly chart on this because, again, I think it puts it in a nice perspective how nicely this has held the 10-week moving average line, how nicely that relative strength line has held its moving average lines. And here what we have, this was not a dramatic pullback to the 10-week moving average line. This was more of a nice little flat area. You know, I mean, yes, it's still 10 % off its highs, But this was a nice little flat area, letting that moving average line really kind of catch up to it. So again, this has already shown a lot of strength.

30:24Alissa Coram:Personally, I was kind of, I actually did very well on this stock in this move up. It was one of my larger positions and I was kind of hoping for a base, but didn't get it. So that's why I'm thinking I'm going to go back into this one. Now that we've had this bounce, an upside reversal here on the weekly chart, but still potentially room to grow here.

30:45Justin Nielsen:Yeah, I love the look of the weekly chart and that support at the 10-week. This is what leaders do, right? You get that steady move, that very predictable almost support at that guardrail, as Jim Robles likes to call it. And then also on the fundamental side, we have a couple of quarters in a row of triple-digit earnings growth. So that's great. And we have a couple of quarters of accelerating top line growth as well. So solid fundamentals and technicals as well. That's exactly what we like to see and a place to manage risk, as you mentioned. Yeah.

31:25Alissa Coram:And again, you see those ratings just very stellar in that regard. You know, composite rating 97, EPS rating 99, RS rating 95. Doesn't get much better than that.

31:36Justin Nielsen:Well, you alluded to a chip stock that we're going to cover, and that is Intel. Look at this price out performance today. Shares up 6.5%, Justin. Clearing a trend line. Already got back above the 21-day line in Thursday's session. Shake out earlier in the week. So this is one of the old guard type names, but I guess you can teach an old dog new tricks.

32:04Alissa Coram:Yeah, absolutely. I mean, it's literally like we're partying like it's 1999 with some of the names that we've talked about. We have Matt Caruso on iBity Live today and he brought up, you know, VIAV, which was the old JDSU, one of the, you know, components of that. You know, and Intel, Cisco even, you know, finally got to its highs and that's actually been looking interesting. So for Intel, again, a lot of strength in the chips. So it's worth it kind of taking all three of the groups. There's semiconductor manufacturing, there's the semiconductor equipment, and there's the semiconductor fabless.

32:41Alissa Coram:So it's actually worth kind of taking a look at all three groups and seeing where the strength is. You can sort them by relative strength, or you can just look at them all. You know, sort them by liquidity if you want to. But this is certainly one that is standing out in terms of the strength. It's almost like a little mini double bottom. So you're right there on the cusp of the middle of the W, if you will. But again, I think you had an early entry here. if you made your line a little steeper, you could have snuck in yesterday. But certainly, I think today, this was showing up as a potential buy.

33:15Alissa Coram:And, you know, this one is a little bit further. I mean, it's already up at 124. So managing your risk here, it's like, okay, 100 kind of sticks out in terms of where you'd, you know, make a cut. But that's a little too steep for me. So you have to kind of say, okay, well, where would I cut my loss? Would that be at today's low or yesterday's low, which happens to correspond right around the 21-day moving average line. So right now, I think for someone that is in this back in April and has, you know, gotten a lot of this appreciation, they can be handling this differently. Maybe let it go down to the 50-day moving average line.

33:51Alissa Coram:But if you're doing a more recent entry, I think the 21-day moving average line here makes sense. And again, that's something that's very important. How you handle a stock is gonna vary depending on where you got in. And a lot of people kind of think, well, that shouldn't matter. You're anchoring a psychological kind of trap there, but it does because psychologically, in order to hold a stock, you have to kind of look at those numbers and what your stomach is able to handle. And I find personally, it's much easier to handle a stock that I have cushion on and let that run as opposed to something where I just bought it, I don't have much cushion, and any move down is me losing capital, which is not something I'm too keen on doing.

34:40Justin Nielsen:Yeah, exactly. Well said, Justin. Okay, next on our list to check in on is NBIS. This was another one that Matt Caruso covered on IABD Live. He always does such a great job explaining the details of what makes leaders leaders. And so, Nebius, the leader in its group, your thoughts, Justin, on this stock's performance?

35:09Alissa Coram:Yeah, it's a nice reminder that we talk a lot about charts, but remember, there's a company behind these charts. And those companies have interesting products, interesting things going on in their industries. And again, what kind of chops do they have in terms of the fundamental side to kind of back that up? Now, I'll be honest with you. This is one that I've struggled with. I do have a position in it again, but I've struggled with this one because I was buying this on breakouts. And guess what? Those were not working out great for me. So this time around, I got it on a pullback. Now, again, a steeper pullback.

35:43Alissa Coram:But look at how it really, really liked to get that support right there at the 21-day moving average line and then kind of cross that steep downtrend today. So, yeah, it's here again, I've got a way to manage my risk. looking at today's low as one area, looking at the 21-day moving average line as another area. So I don't have to take a big drawdown on this. You know, unlike where with some of these breakouts, it was a little bit trickier because, again, they came out so strong that you really didn't know you were wrong until at least you undercut the breakout day low. And sometimes that could be a little bit further away.

36:24Alissa Coram:So yeah, very, very interesting. And again, if folks miss the IBD Live, certainly worth getting a trial to that and taking a look at Matt's appearance. And I mean, we've had a lot of great, great folks on lately. We always do. I love our Friday guests. So Matt in particular is one of my favorites. Yeah.

36:45Justin Nielsen:So awesome. So this definitely has the story. A little volatile, Justin. So for those looking for a new entry here, how should traders be thinking about risk management?

37:01Alissa Coram:Yeah. Again, not for everyone. And so there's a couple different ways that you can go about managing your risk on this. Number one, skip it. Say, hey, it's too wild for me. You look at that 11.4 percent 21-day ATR and you just say, that's something that is not for me, especially if you already have a number of stocks in your portfolio that have higher ATRs. Number two, go with a smaller position size. You know, if you would normally take a 10 % position or a 15 % position, maybe scale that back down to five or, you know, even 3%. You don't want to go too small. At least for me, I find if I have too many stocks, it becomes unmanageable.

37:41Alissa Coram:Once once I get above 25 stocks, I start kind of losing track of them, to be honest with you. So that's kind of my limit. But if you have a number of stronger positions and if you start something at 3 % and then once you get some cushion, then you start adding to it, well, you can start developing a position into a larger position just by adding when you can, adding on some of these pullbacks. So that's another way to do it. If you do have, if you do end up going with a larger position, then, hey, you're just maybe going to have to have a tighter stop. And that might mean you get shaken out, but it's okay.

38:22Alissa Coram:Because a lot of times, if you can just cut your loss very quickly, you can try something a number of times and still not get too hurt and then be able to participate in the one that does move. You have to be careful because again, if you have that percent loss too high, then you can kind of die a death of a thousand paper cuts where, you know, you're taking a 4%, 4%, 4%. Oh, now I've lost some serious money, especially if you have a larger position size. So again, smaller position sizes for some of these, you know, wilder stocks is definitely a way to mitigate your risk.

39:00Justin Nielsen:Yeah. Good stuff there. All right. Well, as we wrap, anything for traders to be thinking about for the week ahead? What should the battle plan, the game plan be, Justin?

39:16Alissa Coram:Well, you know, we did go through our bad break scenario. And for those that haven't watched it, the Swing Trader status update, Webby and I spent quite a bit of time on that. And we had our bad breaks that kind of looked like June 5th. There we go. So take a snapshot of this. Even though right now we look like we're on the road to recovery, I think it's still worth spending a little bit of time this weekend going through some of these examples just to see how these played out. I don't want to overly scare folks, but at the same time, you have to be prepared. I don't want anyone to think, oh, look, you know, our regression lines are great and everything.

39:57Alissa Coram:Because, again, we could very easily come back in or at least do some sideways action and doodling back and forth. Right now, I think the strength in the individual stocks is kind of making me a little bit more lean on the bullish side. But there is certainly that possibility that we could have some of these sideways actions that lasted quite a while. So take a look at some of these over the weekend. I think it's definitely worth your time. Yeah.

40:23Justin Nielsen:I mean, to your point, I think that that's a part of being an active trader, right, is you have to act on or hold back from acting on whenever you see new information. Right. So you can have a thesis, but you have to go with what you're being presented with in real time. So we can have evidence currently of optimism and buying opportunities. But that doesn't mean that we're not going to back away if things head south and we start seeing cell signals and the major indexes breaking. Right. So we'll just have to roll with what we see next week.

41:07Alissa Coram:Absolutely. And you know what? I just realized I did mislabel the ATRs. Those aren't ATR percentages. Those are ATRs. So what we did here was we looked at stocks or bad breaks on the NASDAQ composite that were larger than a two ATR move down at the close. and then we also looked at things that were trending above their 21-day moving average lines for more than 25 days and then sliced through that 21-day moving average line. We also put some extra things on there. Five days later, how low did it go? The lowest that it went in the next five days, next 21 days, and how high did it go in the next five days and 21 days from the low of the bad break.

41:51Alissa Coram:And then how many days did it take for the close to get above the high of the bad break? And you can see there are some here that were very short, but take a look at them because some of them, they might've rebounded very quickly, but that didn't mean you were out of the woods. And then again, some of these, like in 1983, it took 624 trading days before you got back to the high of your bad break. So again, worth looking at some of these, and enjoy.

42:21Justin Nielsen:Okay. Thank you, Justin. We appreciate it. And thanks. Thanks for joining us on a Friday. Love having you. You know, the audience had a lot of Justin this week, and I don't think they were mad about it. You were everywhere this week.

42:36Alissa Coram:They might be ready for a break. So a few things, again, as homework, certainly if you want kind of a short-term bearish case, Mark Minervini laid out some reasons for why he went short very early on, even before that June 5th drop. That was in a market surge webinar. So you can get to that by going onto our video page, going to webinars. It's gonna be right there for you. Also, what a pleasure I had having Jack Schwager on the podcast. Of course, he is the author of Market Wizards, that series. So we talked about his new book that's out, Market Wizards, The Next Generation. And we kind of covered a lot of different things, you know, you know, the academic efficient market hypothesis, you know, what he's learned from all these books that he's written on all these elite traders.

43:27Alissa Coram:So it was a great conversation. So two things to watch while you're having your weekend fun.

43:33Justin Nielsen:We kept you busy this week, Justin.

43:35Alissa Coram:That's right.

43:37Justin Nielsen:Yes. Go enjoy your weekend. All right. Thanks, Justin. And thanks everyone for tuning in. That's it from us for this week. We hope you have a great weekend. Do that homework like Justin said, and we'll see you back on Monday on IABD Live for a shortened trading week. Friday is a market holiday, but we'll see you Monday morning on IABD Live, investors.com slash IABD Live for all the details starting 10 minutes before the opening bell. And then we'll see you back here Monday after the close.

44:41Justin Nielsen:Transcription by CastingWords

44:45Alissa Coram:I'm Telus Demos.

44:47Justin Nielsen:And I'm Miriam Gottfried.

44:48Alissa Coram:We break down the big trades and speak with the key players. I'm very focused on making sure that we can get inflation back to target.

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