J.D. DURKIN: A very good Friday morning, subscribers, one and all. APP team member Bruce Kamich joins me now for a technical check in on the markets, as well as a breakdown for what to expect, as Wall Street heads towards the much-needed long holiday weekend. Bruce, thank you for being here.
Thank you. My pleasure.
J.D. DURKIN: So of course, we had our fair share of Fed speakers, or Fed heads, this week, ahead of this morning's very important PCE result, but the S&P is more or less where it was when we started the week. Bruce, what's it out to you in this week's trading?
BRUCE KAMICH: Well, the news dominated trading more so than the price action. Everybody knows the top-of-the-fold story for days has been the debt limit talks and all the drama surrounding it. And people are following it closer than parsing every word from some Fed speaker.
Enough is enough already. So they're missing the bottom of the fold story. I think they're underplaying it with a lot of the tech earnings and a lot of beats and also the retail earnings with a number of beats and some not so beats. It's like which part of the market do you want to watch, the drama in Washington or the real news coming out of the economy?
J.D. DURKIN: So that tees me up perfectly to my next question. Is there anything that you're watching, maybe, Bruce, that the average member, maybe, perhaps, ignoring a bit or not paying close enough attention to?
BRUCE KAMICH: Yeah. I think two things. I think the third big story this week-- and it will continue-- is AI. I might be dating myself a bit on how I respond to news, but a few years back, there was a parade of people, day after day, about blockchain and cryptocurrencies.
And I'm trying to Google them, and I find out I know nothing about them. Their bios are pretty short. They speak in terms and use words that I never heard before, that I'm not in the Oxford Dictionary. It was a bit confusing.
I find it actually refreshing, all the news headlines and interviews on all the major channels about Artificial Intelligence, AI. These are real corporate leaders in technology and other knock-on industries, real implications of the applications of this, real numbers in terms of what it can do for productivity, for all different kinds of things. And it's refreshing that you actually know these people, and they had careers long before last week. That's one big feature I think that has been getting enough credibility, and for people to try to figure out what they invest-- what the maybe top six investment avenues are for this.
The second thing that I think is getting missed is Japan was in the doldrums for decades, after the 90s, and now, their stock indices, particularly the broad TOPIX index, has made multi-year record highs. I haven't figured out which industries I might want to be involved with or recommend to our readership and subscribers, but it could well be the automotive industry in Japan. They're really pouring billions of dollars in, like other companies, into the EV world, and that might be one of the outstanding investments going forward. So that has gotten lost in the shuffle this week.
J.D. DURKIN: For sure. You checked in on the stock of APP holding Marvell, Bruce, heading into earnings, over on Real Money, you note a bit of a bullish setup. How is that stock looking to you today, I wonder?
BRUCE KAMICH: Well, I think it's going to gap higher. I didn't see the opening. We were busy setting up for this interview.
But it's made a big base, and it's gone-- the base goes back several months, as the chart shows on this picture. The breakout is a strong close, about $50 on increased volume. I wouldn't doubt that that's happening today.
And point bigger targets I have, first one is $69. So it's not an insignificant breakout, and it's not a minuscule base. So this kind of rally is going to have some legs to it, and the volume has been increasing in the past few weeks.
So investor interest has picked up in advance of it. This is not like a short covering rally, where you were betting on a disappointing earnings number, it didn't come in. And you're forced to cover your shorts, but there wasn't any buying in the weeks leading up to it. This has buying leading up to today's breakout.
J.D. DURKIN: Sure. Bruce, you also took a look at Microsoft. Talk to me about that chart and what it's telling you, as the company puts its money where its mouth is, when it comes to generative AI. We've heard that word many times, in the last few weeks, introducing Microsoft Fabric, earlier this week.
BRUCE KAMICH: So it too made a base. From last June to March, it broke out. I have point-and-figure targets of 383 and 412 for this stock. It's a household name. It's been around for a couple of decades, a great outperformer.
And some of the people that are convinced the market doesn't have legs will point to Microsoft and three or four other stocks that have dominated the percentage gained in the S&P and in the NASDAQ. Instead of looking for the rally to broaden out, which it has been doing quietly, like Marvell is not a household name, but it's broken out. There's too many complainers that it's Amazon, Apple, Microsoft, Nvidia are the market leaders, and too much of the gains are attributed to those few stocks. And they're worried that this is going to stop at any minute, and so they're not participating in the rally, and so they're fighting it.
J.D. DURKIN: Sure. All right, Bruce Kamich, thank you so much. Enjoy your long holiday weekend.
BRUCE KAMICH: You too. Enjoy it.
J.D. DURKIN: Absolutely. All right, members, we will be off on Monday, of course, for the Memorial Day holiday. But Chris Versace will be back bright and early on Tuesday to get ready for the holiday-shortened trading week coming up. Have a wonderful long weekend, and we'll see you then.