Next Day Prep: Alphabet’s Ironwood AI Chip Disrupts NVIDIA
A quick analysis of today’s market outlook and key trading opportunities to start your day.
Intro & Market Mood
Welcome to Next Day Prep – What We Are Watching Tomorrow. Today’s market session was challenging for growth stocks, characterized by significant selling pressure and broad-based declines in major names.
Overnight Headlines
High-flyers like ELF Beauty, Duolingo, and DoorDash faced substantial drops, with even giants like Tesla, NVIDIA, Meta, and Amazon bearing losses. However, Alphabet stood out positively with reports on its AI chip.
Economic Announcements
The market saw a rotation into safer sectors like energy and health care, with utilities also showing late-day strength amidst concerns over stretched valuations and excess speculation.
Earnings Highlights
Despite beating estimates, Duolingo faced a significant drop post-earnings due to concerns over its growth narrative emphasizing user expansion over immediate monetization.
Top Movers
Key movers to watch include Alphabet (GOOGL) and potential opportunities in MTSI for continuation setups, EXPE for high volatility plays, and CBOE for more methodical trading.
Quick Trade Ideas
- MTSI: Look for a pullback buy in the $166-$167 range, targeting a move above $169.
- EXPE: Monitor support levels at $232-$235 for potential moves towards $245 and $250 amid high volatility.
- CBOE: Consider entries around $252 for an uptrend towards $254 and beyond.
Key Takeaway
Amidst market volatility and rotation, traders should focus on relative strength, disciplined trading plans, and risk management. Watch key index levels, focus on proven setups, and be cautious in the current high-volatility environment.