The Rock Trading Group
CMT, Technical/Situational Analysis, Options Trading
Microsoft broke above $433 after two rejections and closed at $445, so it will likely be chased toward its 200-day average near $458, with some continuation likely into Monday on its Taiwan product launch with Nvidia. $487 is the ultimate target, but this is the tail end of the trade, where risk/reward is starting to get capped. x.comÂ
Anthropic's S-1 and @UncleAlpha007's claim that Microsoft is growing despite a 27% headcount cut have turned the near-term tech-equity view bullish. At least a tradable rally is expected; further upside depends on Iran developments and PCE. Stay nimble. x.com x.comÂ
Microsoft looks set for continuation after breaking out of a flag, with a gap up to $480 as the best case. Software is catching a bid, the chart has broken into the gap from last earnings, and Microsoft holds an event in Taipei to release an agent-optimized operating system. It already trades around $465 on Hyperliquid, which has been fairly accurate on most names lately. x.com x.com x.comÂ
Microsoft is cheap but not a long-term holding, because it is not growing fast enough while Nvidia is cheaper, growing much faster and better positioned. Microsoft may be re-rating, but the backdrop could also push it to a 15x P/E, so for now it is only a tradable situation. x.comÂ
SpaceX's beat has relit the AI trade and given semiconductors a fresh catalyst. Chips led Wednesday's close, with AMD, Nvidia, Micron, Marvell and Broadcom all up, but SMH is still below its 21-day average near 594. It needs to hold 536 and reclaim 562 before buyers regain control; 594 is the next test. x.com x.comÂ
Uncertain AI-capex profits and higher oil costs from Iran still threaten US stocks. The SPCX-Nvidia deal brought much-needed overnight inflows to chips and is shifting sentiment, but tech's waterfall decline will not heal with a sharp V-bottom. Be prepared for a big fade. x.comÂ
Microsoft looks due for a pullback after rallying from 390 to 491 in about two weeks, as capital rotates out of software into semiconductors. Heavy trimming makes sense here; dealers appear positioned for a mini pullback while semiconductor, AI and photonics stocks such as Nvidia, AMD and Intel bounce. x.com x.comÂ
Significant institutional-level dark-pool activity supports Nvidia's potential Q4 move back to its high, then $264 and $280. About $11 billion came in around $222 and $227.50, but the ride may be bumpy. After another pullback, holding the $223-$226 area for several days would confirm the setup; repeated sideways action after break attempts means staying away for now. x.com x.comÂ
Nvidia looks interesting again because rising earnings estimates have not been reflected in its valuation. FY28 EPS estimates rose about 25% in 60 days while shares stayed roughly flat; it trades below 14 times FY28 earnings with a mid-single-digit free-cash-flow yield. Exponential change is hard to grasp, and it is hard to see Nvidia not winning if the US does, though there is little capital to absorb market wobbles. x.com x.comÂ
The market wants Microsoft to be the first hyperscaler to slow AI capex, and while that would lift its shares in the short term, investors will later realize what it means and panic. Per Goldman, the first hyperscaler to signal slower spending will likely be rewarded, others will follow, and that reflexivity stalls the capex cycle; Nvidia is trying to prevent it. Asked by Michael Hartnett how far hyperscalers must fall before the market trades capex cuts, the answer for Microsoft is 2021 levels. … Show more
Rising Chinese competition and doubts about valuations add to Nvidia's downside risk as the AI sector bleeds. Nvidia's break from an uptrending triangular pattern rarely ends well; the AI bubble is cracking, and the trendline break marks the beginning of something much bigger. x.comÂ
