Looking For The Next Big A.I. Trade - Marc Chaikin, Chaikin Analytics

  • 7 months ago
Today's Guest: Marc Chaikin, Chaikin Analytics

Benzinga's PreMarket Prep is the #1 go-to source for everything you need to know before the market opens! Join our expert hosts as they break down the latest market trends, analyze key indicators, and provide actionable insights to help you navigate the trading day ahead.
Transcript
00:00 Mark chicken chicken analytics joins us every other Thursday to give his technical
00:05 Fundamental outlook on the markets you heard us ranting. We saw you in the back
00:10 Market now I saw you chuckling there. I mean
00:14 Chips here. What do you do with a rocket ship like SMC? Yeah, you get Alan Greenspan on
00:21 talking about irrational exuberance
00:24 I
00:24 Mean I've had this mark since I bought it back in September because I thought it was could be an AI story
00:30 Eventually, it really sat there and did nothing for about four months
00:34 Yeah, then started to blast off when Nvidia started to go then they came out
00:38 I was obviously the guidance, you know that the catalyst here was the guidance was much higher than everybody expected and they haven't stopped buying
00:45 It's sense. I mean, I've sold two-thirds of the position here now, or maybe even three-quarters of the position
00:51 I'm thinking about ringing the rest of the register. Well, what do you do?
00:54 Like I mean, I'm not in rocket ships that often that go up, you know, 300% six weeks
00:59 Do you ring that stuff you pick some round number like they're pushing a thousand, you know
01:05 Sell into that craziness at some point you got a part company and say thank you
01:11 you're doing the right thing from I know you know you're doing the right thing from a
01:14 traders point of view you sell a third you sell a third and
01:19 You know on the first double you sell a third on
01:22 Quadruple and then you look for a spike to get out of the rest. There's no right or wrong. It's a winner
01:28 That's yeah, you know take it to the bank
01:32 Right, what about some of your picks out there Dennis you want to stay on this I AI train here
01:38 Yeah, I mean let's get his thoughts on Nvidia here as well because obviously everybody talks about it
01:45 You know, see if he talks about 10,000 times a day. We talked about at least twice a day
01:48 Probably I mean we're all-time highs basically a couple bucks off all-time highs here
01:53 It's kind of consolidated with this. This one doesn't feel like SMCI where it's one parabolic and went up 300%
02:00 I mean, it's up 40% this year. It's much more reasonable to move, but the company's enormous. What are your thoughts here?
02:06 I mean on Nvidia. Well, I'd say as long as people keep comparing it to Cisco in 2000. It's okay
02:14 When they stop talking that way then you got a problem, I you know, AI is real the boom is there
02:20 They have the best chips that keep coming out with new generations and faster chips
02:24 When you have a tiger by the tail have some sort of mental stop
02:30 But there's no place to put a stop on something like this
02:32 so yeah, I've
02:35 Been seeing that a lot that people are overlaying the chart of Cisco on Nvidia or even overlaying the you know
02:41 Financial times I think it hit the one of the major media had I'm not sure was the Financial Times
02:45 But I thought they've been all over the internet for months. That's see that's the point
02:50 they've been all over the internet for six to nine months, so
02:53 They're in stop-clock territory gonna be right twice a day so
03:00 Hey, it's a monolith. Would I buy it here? No, but I tell you my wife Sandy has had it since
03:09 2020
03:11 2021 she wrote it down in the bear market and stayed and then added that's the key
03:16 She added on the way back out. She brought it in March of 2023. She added and that positions up
03:22 164%
03:25 Mark, you watch me holding is she still holding at all or has she pieced out? I I
03:29 Twisted her arm about two weeks ago when it spiked and she sold a third of her position, but that's it
03:35 She won't get to sleep in the basement. I
03:39 Don't want to wait. We're going up
03:41 But looking ahead there are so many different ways to play AI from the consulting companies
03:49 Which are going to benefit mightily because they've got a you know corporations
03:53 Know they're behind the curve and so they've got to go to people like Gartner
03:57 That's why Gartner is off the charts, but we talked about GIB last week
04:01 and you know the various consultants that are going to be brought in here to
04:07 Tell companies what to do basically, I mean some people know like service now if you're looking for
04:14 You know a company that got a lot of juice out of AI. It's in their business. It's service now
04:20 so you got a little dip and
04:22 You've just got to buy these things on dips whether it's an earnings related guidance related dip or just people taking profits
04:29 but there's
04:30 There are so many different ways to play AI
04:33 There's a company that I like that took it on the chin Dynatrace DT
04:38 After earnings it was a great earnings report, but you know that that's what can happen
04:44 When people sour on a stock that's had an AI
04:49 Spike would you be a buyer of this DT dip?
04:52 Yeah, but but very gently because it's broken below my long-term trendline. So the power gauge is now neutral plus on it
05:01 It's no longer bullish. Yeah, so cyber security plays for the AI trade. Oh, yeah
05:06 Absolutely. Well Palo Alto reports next week if you've got cojones
05:12 Report reports on the 20th and God knows what yeah, they're a crowd strike obviously
05:21 fortnet
05:23 we've previously recommended
05:25 and that that chart has totally reversed and
05:30 You know, these are great plays obviously cyber is where
05:34 AI is gonna get really
05:39 Sexy
05:42 Another industry that's been I guess sexy over the past few weeks has been crypto a lot of crypto stocks running mark
05:49 Are you watching any of those coinbase up?
05:51 big over the last week or so
05:54 I'm only watching him because coinbase got a bullish power gauge rating on November 20th and the stock was about a
06:02 hundred
06:03 Other than that, I have no interest
06:05 In any crypto at all. No, it's just it's my bias
06:09 didn't
06:12 buy him on the first wave two years ago and
06:15 Avoided the sell-off and I just not a believer. I'm not the guy to go to for crypto
06:22 Yeah, I'd rather stick with the AI trade over the crypto trade right now as well. Well, I mean, it's totally different
06:28 One you're buying a puff of smoke and the other you're buying some serious stuff
06:33 at this point in the market I
06:35 Use the power gauge, but I'll look for formations which is goes back to my old roots as a you know a pattern
06:44 Chartist, but when I see a triple top here and the second high
06:49 The third high has come under our long-term trendline, which is around 190
06:53 So it stopped that rally of the earnings report stopped right on our long-term trendline now chicken money flow is still fabulous
07:02 They've been accumulating Apple since late October
07:06 Now when I say accumulate the chicken oscillator or chicken money flow was meant to
07:12 Oscillate around zero. So if you get a sell-off of five to eight days
07:17 You would normally expect that the money flow would go in the red which it did in August and September
07:24 Stayed green on every one of the sell-offs and what that means is that people are coming in late in the day to buy it
07:31 So well, that's a port - when would it go red with took out the 180 would probably go the other way like that huge support
07:38 We're looking at money flow or the power gauge. Well both well money flow. I don't know
07:43 it's a dependent on volume and where it closes in its range, but
07:47 You know, there are plenty of stocks with red money flow
07:51 Look at charter communications or any of the the stocks with bearish ratings
07:55 so
07:57 you know, I'm torn between Apple as
08:00 An avoid or Apple is to buy the dip but the chicken money flow says by the dip
08:06 But the trend says, you know, there are better
08:09 You got a found indicated with your own name on it mark before before we let you go here
08:14 I just want to talk rates for a second. We talked about the bond traders
08:18 You've had a decent sell-off here. You saw the reaction to the CPI number. We kind of looked at is a
08:24 Overreaction here. We're looking at steady as she goes and rates not going up going down a lot
08:31 Just give us your outlook after that
08:33 Little bit hotter overreaction to the CPI number on Tuesday
08:37 Well, first of all anybody who was looking for five to seven rate cuts in
08:41 2024 was smoking pot. I mean, come on
08:44 and you know
08:47 Three to four maybe now. I think it's two to three and coming after
08:52 after the political conventions in the summer, so
08:57 What I like is that the market has found its footing very quickly at the 21-day average and buyers came in on
09:07 Tuesday in the final half hour and pushed it up a hundred almost 1% about eight tenths of a percent
09:14 So I think where this is going to bite is in the construction
09:18 Industry in the home building industry because they were really counting on rates mortgage rates dropping
09:24 Down into the mid six to low six and now they've ticked back up again
09:31 To above 7% so I think this is going to bite in the mortgage home builder stocks mortgage related and
09:39 So you're seeing it already the chart patterns and stuff like dr. Horton
09:45 Just not looking that great
09:48 but I think in general the stock market is the stock market does a lot of money on the sidelines still and
09:54 Interestingly, I think the biggest key to figuring out what's going on is there's still whatever four trillion
10:02 Money market or five trillion. I don't get have the number right now
10:06 So where the money come from to fuel this rally? Well, it's coming from foreign money. It's coming from
10:12 The bond market and
10:16 There's plenty of fuel here. This markets not quitting little decoupling that maybe between the bonds. Oh, definitely
10:23 Yeah, and you but be mindful if you're a trader particularly that you you're entering the period
10:31 In the election year cycle between mid-february and the end of May when you do get choppy
10:36 So this this is the challenging period end of May on you're in pretty good shape

Recommended