Market Backdrop
The first two days look like calm before a storm ahead of upcoming data and earnings. Trading has turned more risk-off within the AI sector. Nvidia (NVDA) has beaten earnings and raised guidance for several years, so another beat and raise would not surprise anyone; the stock has still tended to fall after earnings, and traders seem to be pricing that in. Over the last week and a half the market has gapped up or opened higher, then worked lower during the day. This comes ahead of inflation data, and Fed remarks on Friday could carry large implications for the rest of the year. The result is choppy weakness.
Alphabet (GOOGL)
Alphabet popped early in the month, then went sideways. It is trapped under faster EMAs, which creates technical resistance but also sets up a possible breakout. I want GOOGL to break above 352 and stay above it; if it does, it can run to 370. The trade is the September 4 362.5 calls, expected to trade around 3.85 at that time - enter at that price or lower. Risk is 40%; a win should scale over 100%. Do not take the trade until it breaks 352. The stock sits near 346.38, just below the trigger.
Chart read: 352 was roughly yesterday's high. Above there, resistance sits near 360 (a high during the decline) and 383 (a post-earnings high), with old highs near 394 never reached. To the downside, 340 marks repeated lows after the gap up, and a more extreme post-earnings low sits near 315. The 5-day, 21-day, and 63-day EMAs cluster tightly between 345 and 350, showing no clear trend, just sideways chop with little net movement. The 251-day (yearly) EMA in orange comes in near 313. RSI shows a triangular shape just below the 50 midline, a slightly bearish lean that could flip fast on a breakout. Volume profile shows a node at 357-367 and another near 340; the point of control, the heaviest trading area on the yearly chart, is near 318.
Amazon (AMZN)
Amazon is down slightly today but up about 13% year to date. The setup matches Google: it hit faster EMAs and rejected today, and the broader market pullback added pressure. I want a breakout above 265 for a rally to 280 and higher. If it breaks and holds 265, the trade is the 270 strike calls at 3.50 or lower, same 40% risk and a return easily over 100%. Both AMZN and GOOGL have what I call profit pockets - clear space where the stock can move without much interference. Retail traders use technical analysis, and near key levels they take profits while sellers lean on those levels to start shorts. Without a reason for risk-off trading or new shorts, these breakouts stay in play. AMZN trades near 260.50, down about 0.6%.
Chart read: highs came at 287.20, followed by a steep decline that dropped below the initial post-earnings lows. It bottomed near 258-257 and has not taken out old highs near 255. The shape is a falling wedge, usually read as bullish but able to break either way; watch for a move beyond either boundary line, which triggers a cascade of orders once support or resistance breaks. The 5-day and 21-day EMAs sit together near 261, but here that clustering came from a sharp spike and partial retreat, not a sideways grind. The 63-day EMA and a quarterly EMA sit just below. An old downward-sloping white trend line, now potential support, is another area to watch. RSI is 51, trending down but above the 50 midline, a slightly bullish read. Volume nodes sit at 260-265 and 272-275; trading picks up heavily near 250 if price falls.
SpaceX (SPCX)
SpaceX has been public only since this summer. Last week the plan was for it to get above the 135 IPO price and hold; it is now above, at 137.22, up more than 1.5% today. Above 135 I like the upside. The 50 SMA just appeared near 140 and should act as short-term interference. A close above 140 opens a route to 150-155, and above 155 there is breakout potential to 175. If it holds 135 and clears 140, the trade is the 143 calls for the September 4 expiration at 3.85 or lower, with a 40% stop. The stop is set because once price drops below these levels the option premium retraces, so there is no reason to stay long. The upside may be smaller than the others, since 150 may be hard to break near term; a move to 150 should return 90% or more, and a break through 155 could turn explosive toward 175 for a home-run trade.
Chart read: with little data, technical analysis still works because it is fractal - the same ideas apply on any timeframe. On the hourly chart there is an upward trend line off a low and higher points, plus a downward-sloping trend line across the highs that has now broken. Horizontal levels include a double top near 150, repeated lows and highs near 136, old highs, and later lows near 130. Because of the short history, simple moving averages are used instead of exponential ones: the 20-day SMA (olive) is near 130 and the 50-day SMA (blue) at 140.83, leaving price between them. RSI has broken its downward trend line, uses 14 days, and sits above the 50 midline - a bullish lean. On the hourly chart, price is right on the point of control; above 142 volume thins, then builds again between 149 and 163. To the downside, the important zone is 121 to 126. SPCX trades near 137.50, up about 1.8% on the session.
