The market has turned one-dimensional, driven almost entirely by AI plays, especially hardware infrastructure names. This is not a problem. No matter how bad the news gets - inflation, weak consumer sentiment, high oil prices - the AI stocks, both hardware and the "Metas" releasing strong agents and GL VR glasses, keep carrying the whole market higher. If oil could get under control, the market would rise even more. Consumer sentiment hit a four-month low this morning, yet the markets barely reacted and opened stronger than the prior two days.
The best approach in this market is to day trade a small handful of stocks in the hottest, leading sectors. This kind of market makes it clear what to trade. Look for the strong stocks even when broad data is worrying, because good names always exist, and in the AI sector they are all leaders.
AMD (AMD)
Compute is the most valuable resource, possibly worth more than oil someday - compute, power, and AI are the new oil. Demand is endless, and no one can buy enough hardware to meet the load. Even Facebook (META), which likely has more data centers than anyone, is hitting capacity limits a week into launch, with users getting timeouts. So many people want to use the technology that even the biggest player lacks enough compute.
AMD (AMD) rose after news tied to an Okami/Anthropic deal, with BofA raising its price target on a stronger CPU outlook. AMD trades higher on the session, up about a third of a percent, around 631.39 (earlier 631.28). AMD is essentially a "baby Nvidia" (NVDA) - same sector, very similar products, just without the star power of Jensen Huang.
Beyond buying the stock, the 650 calls for next week are attractive, especially if AMD pulls back a bit or closes near the "red to green" line around 630. The options break-even is 661.
Technicals: AMD holds near yesterday's highs around 630.80. The recent open lines up closely with old highs from a range-bound area that had a floor near 451, plus a gap up near 560. Yesterday's action showed a red harami candle (fully contained within the prior day's larger green candle, measured by real body from open to close, excluding wicks) followed by a bullish engulfing candle (today's green candle swallowing the previous day). Bullish follow-through would be the confirming signal, and so far the stock looks on pace for a higher close. The 5-day EMA at 613.27 is the nearest possible support. The 21-day EMA near 548 would mark a break below the trend line. RSI is above 73, in overbought territory, but not making a new relative high - a small amount of bearish divergence to watch. Most trading activity sits between 528 and 547.2, with a small pocket above 600.
USDE (USDE)
This is a very speculative, aggressive, volatile stock - those who dislike extreme volatility should skip it. It has been a powerhouse since Bitcoin got back to the 80,000 level, breaking out on the daily chart. It has become the "darling" of the crypto stock market, a meme stock everyone is talking about and piling into on X.
On Bitcoin: hold it, never sell. Buying started around 2012-2013 at roughly 80 or 90 dollars per coin. When Michael Saylor's Strategy sold some Bitcoin - after telling people they could sell a kidney but never their Bitcoin - a mass selloff followed. Bitcoin is expected to hit 100,000 by the end of the year and return to all-time highs by late spring or summer next year. USDE should benefit from that. For those who do not want to trade crypto directly, USDE basically follows Bitcoin. USDE has no options, but it is volatile enough that trading the stock alone delivers option-like moves.
Bitcoin traded a little under 85,000 at the show's open. USDE is up 6.25% on the session even though Bitcoin and Ethereum are both slightly lower.
Technicals: The chart shows one of the clearest cup-and-handle patterns possible. After an extreme volatile period, it hit a notable high near 820, then formed a gradually rounding base, surged back to that high, fluctuated into a downward move, then continued the uptrend - textbook cup and handle. It broke above 820, formed a gap from 10.56 to about 12.20, and now tests old highs near 15.15, with intraday highs beyond that level today and yesterday. Old highs can become support later. The steep upward trend line is still in play. RSI at 75.40 is overbought, a sign of strength in a trending market, on pace for new relative highs. Volume profile shows accumulation between 12.80 and 13.90, with point of control near 7.65, lining up with the middle of the cup consolidation. This is a short-term momentum trade, not a long-term thesis - manage risk and do not treat it as a forever hold.
Meta (META)
Bullish on Meta (META), driven by AI agents. Agents handle many tasks. Facebook's most active users skew older, toward the baby boomer market, many of whom have not tried these tools. Another Wall Street Journal piece today pushed fear that AI will "kill us all," and much of the Facebook demographic has seen this fear and avoided AI. Some older traders were not using AI at all. Facebook can break through with people who have been resistant or scared, because it is a familiar brand and will heavily promote Muse - about a hundred times a day. Users who avoided Anthropic or ChatGPT, the two biggest names, may now try it through Facebook, discover how strong the agents are, which explains the big breakout.
The one-year, one-day chart is struggling, but clearing current levels would send it much higher. The Facebook 800 calls are attractive, especially if it trades in the 730 to 750 range for a while.
Meta trades just north of 750, at the top of that 730-750 range, at 750.60, down on the day but up more than 12% over the last five days. Break-even reasoning centers on an outright buy of the 800 calls.
Technicals: A surprisingly volatile chart for such a big name. An earlier gap matches old highs where the stock paused after a sharp push up; that area is now becoming the low - old highs turning into lows. It topped so far at 779.82. On the downside, repeated highs near 682 are the next level to watch after the recent big green candle. A very steep, sharp upward-sloping channel remains in play. Today a harami candle is forming (early in the day, could change), which suggests a possible stall or slowdown in momentum, though candle patterns are fuzzy. The 5-day EMA at 742.73 sits where the blue weekly exponential moving average comes in, in the middle of the channel. RSI is still overbought but on the edge of crossing back below both the trend line and out of overbought - watch whether that bullish-or-bearish signal confirms into the close. Volume profile shows 710 to 724 as the most important node near current breakout levels, with point of control near 660.
