Market backdrop
The S&P 500 traded red on the day. Retail sales came in weaker than expected in the morning. The number first looked like a warning sign, but the market perked up after it hit. The rule for a short-term trader: don't anticipate, react.
The bad economic data gets outweighed by earnings. S&P 500 profit margins hit the highest level ever recorded, per a chart from barchart.com. Those margins have been grinding up and up, with a big dip during COVID, then a parabolic leg higher. The market has stayed completely disconnected from the economy over the last couple of years. That makes tech a target-rich environment with strong earnings and plenty of trades. Trade the price action instead of hiding from the economic numbers.
Palantir (PLTR)
A volatile, divisive name. One view calls it the most overrated AI stock. My read is bullish long term. Palantir's technology is among the best out there, including its ontology layer, and CEO Alex Karp favors open models. Many people hate the company because of things executives say and overlook the tech. Palantir's work has helped keep US service members safe by giving them the data they need. The big bounce this week partly reflects Palantir taking a contrarian stance on open versus closed models. The stock was a mess through spring and summer, but it is back on the right trend, and this looks like a good buy near current levels, with all-time highs possible by fall.
Chart: the stock lost almost half its value from the highs to the lows, then rose 66% from lows near 106.37. Earnings drove a notable gap up. The relative low since earnings is 143. Support sits around 166 and 162 based on prior lows and repeated highs. To the upside, 180 has capped price several times; a break there points to 187, an old high from a gap down that was retested but never broken. Since the gap up, price trades inside an upward channel drawn across the lows and copied across the highs. The 5-day EMA near 173.40 is the only moving average close to price, and it also marks the channel's edge. RSI zigzags in and out of overbought, just above the 70 line. Bulls want it to hold above 70 and make new highs; bears want a break below 70 and below the channel. Volume nodes sit near 155 and near 180. Trading down about 1.25% at 176.81.
CrowdStrike (CRWD)
Up close to 90% this year despite negative headlines over the past two years. Down about 2% on the day but still near its highs, with a nice trend over the past week. The logic: if it does no wrong, you stay long.
Chart: a wide, widely spread channel drawn off the lows lines up reasonably well with the highs. A steeper blue trend line broke recently but did not lead to a breakdown; the stock made new highs instead. Old highs sit at 219 and around 218 and are being retested. After sideways chop, a new intraday high of 227.50 printed today, which now becomes an area to watch on a break lower. Relative lows come in near 202 and near 174. The 5-day EMA at 220 sits just above current price. The 21-day EMA near 206 (teal, one month) is another level to watch. RSI showed a bearish divergence: price made a marginally higher close while RSI made a lower close, and RSI is now breaking below 70. Watch whether that turns into something bigger. Volume nodes near 190 and 170 stand out. Down about 2.7% at 219.45.
Cloudflare (NET)
Near its 52-week highs hit after earnings, within 50 cents of that level today. NET surfaced through a swing-trade AI tool built to find hot-sector, hot-theme stocks; it was one of four candidates last week, but CrowdStrike got the slot instead, and NET went on to have a great week. A substantial part of the internet runs on Cloudflare. The company builds security and infrastructure around AI agents and the broader AI buildout, making it an AI infrastructure play that supports app and agent builders without being a pure AI name. Positive earnings report and a bullish chart.
Chart: price broke out of an earlier shape into a narrow, steep channel drawn in white. Highs of 332.22 came just yesterday. Price has since given back a good deal of those gains but holds well above the old best close around 311. Levels to watch: 305 and 290, both prior notable highs. The 5-day EMA near 315 lines up with the trend line, forming a confluence point for support or, on a break, weakness. The 21-day EMA (teal) sits at 291. RSI is a bit below 70 after one day above it yesterday. Bulls want new highs in price matched by new relative highs in RSI. Volume profile shows the heaviest trading near 270, tied to old highs from late May, with a small amount around 300. Down more than 3% on the day, worse than the broader market, at 320.75, about $32 off yesterday's high.
