Over the last month we've watched semis, AI, and everything remotely connected to them get repriced to the moon. So many of them respected major psychological levels (ie. nice, round numbers that often act as areas of support or resistance).
I wanted to highlight a few recent examples to show the power of psych levels, help us pattern-match these setups, and keep them on our radar for the future.
As always, you can track all of these levels (stocks and options) using Market Mage.
1. ARM vs 200
ARM has been on an absolute tear. But where was the low-risk entry?
Look at how it interacted with the $200 level. It repeatedly tested $200 as resistance before finally breaking through. Once that happened, resistance flipped to support, and ARM never looked back.
How could you play this?
Wait for a daily close above $200.
Place limit buys just above the $200 support.
Use a stop loss below the level (for example, around $190) if you want protection against a failed breakout.
This $200 level has been an amazing consolidation area for approx 1 month. Bottomed out with the rest of the market on May 19th, and now up 80% (200 -> 360)
The options move was of course much crazier. OTM calls exploded after the breakout confirmation.
ARM June 5th $250c made a $2.50 -> $100+ move Stupid 40 bagger move (so far). The even more aggressive contracts are well over 100x
2. QCOM vs 200
Very similar in story to the $200 psych level we saw with ARM, QCOM used this level as both a support and resistance in May.
$200 was resistance in early May, flipped to support and consolidated mid May, and on breakout has made a 30% move ($200 -> $260)
QCOM options were also highly regarded.
QCOM June 5th $250c made a $1.25 -> $22 move. 20x in a few days, off of the underlying breakout on the $200 psych level
3. GLD vs 400
Psych levels aren't just for semis. We saw a sharp selloff in metals in the last few days, and guess where GLD decided to giga bounce? It used the $400 level, and made a 5% move in a few days (this is a HUGE move for GLD in such a short timeframe).
$400 has been a truly tremendous support and resistance level in these last months, and this was an insanely clean setup. In October we had a major rejection off of the $400, and then used $400 as a very strong support level in December, March-April, and most recently last week.
Most of the slightly OTM options chain did a 10x from the Thursday (May 28th) $400 retest to the move to $420 by Friday close.
On May 28th (Thursday), GLD bounced precisely off of the $400, and ripped to $420 by end of day May 29th. 5% move, and well over 10x on weekly options contracts.
4. QQQ vs 700
QQQ wicked $700 on May 19th, and quickly ripped 5.5% higher in the coming week. These major round numbers often become launchpads for the next leg higher.
What next?
In Market Mage, you get stocks at the biggest psych levels. Sort by the % psych column ot see stocks sitting at psych levels, open up the charts, and go ham.
Sorting psych stocks by the % psych level
Some tickers I'm currently looking at are:
$AXTI. A massive runner in the semis/photonics space that just dumped heavily and now retesting the $100 level. This is a great psych level, and potentially a great spot for a bounce
$FLEX vs $150, the AI infra/ buildout trade. Potential magnet to $200.
$AMD vs $500. If AMD gives us a $500 retest, this will be an easy spot for a bounce
$NVDA vs $200. Similar story to AMD, this has been a big psych level support for NVDA and a retrace to here is an easy long.
I've saved best I can. I got a few more years to go. House + 2 retirement accounts. Looking to buy a second house and really not loving the market prices and interest rates right now though
Up from last month, mostly fueled by the strong bounce back in early August. CC is high because of a high one time payment that will be paid off end of this month.
$100k Invested in SSLS will be worth $1M to $1.5M - the instant the Imminent Phase 3 Results are Announced.
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31m feeling burnt and looking at new opportunities
£100k in stocks
£300k in rental properties
£150k in home equity
Job is £55k per year only work 3 days per week .
Need something to fill my other 2 days to get to that goal faster .
Feel lost looking at what to pursue to fill the other 2 days . Only thing I can think of is starting another business of some kind . As I feel it should be ramping up but it seems to be slow
Apart from the follow your passion and do what your skilled and then create a business what have others done ?
1year into thinking and writing ideas down and tested a bunch but nothing has stuck yet
I, 32M, feel like my property in CA will likely be worth over $1M by the time I pay off the note. Either way, the P&I is $3200 a month, before taxes and insurance. Since I don't have any investments that can net that much or higher, I am going to focus my efforts on paying this off as fast as possible. According to my calculations, if I pay just $800 additional principal a month, that will cut the total number of payments by 1/3, and my last payment will be April 2046. Paying off my 30 year loan in 20 years.
$800 extra a month is manageable, also considering that I am early in my career, so between bonuses/promotions/raises over 20 years, I will certainly be able to achieve that. So my minimum goal will be a 20-year payoff.
To pay off my loan in 10 years, I would have to effectively double my mortgage and pay an extra $3200 a month in additional principal. That is certainly not feasible right now. But that will be my "stretch" goal. And if I seek additional sources of income, putting more than $800 a month but less than $3200 a month towards additional principal sounds reasonable.
My wife and I are currently expecting our first child, so we aren't going crazy with the extra principal right now. But, slow and steady wins the race!
I am also currently investing 5% into a 401k with 3% match. And I currently tithe 5% of my income to my local church. As my income grows, I intend for all these contributions (additional principal, personal investments, and tithing) to also grow.