The Dow and the NYSE Composite both remain in uptrends along rising 10-dma support while the small-cap Russell 2000 was the only major index that was down on Friday. This would imply rotation into non-tech areas of the market, but this has so far failed to produce any names that we would be thematically interested in.
As we have noted previously, leading AI-related semiconductors and other techs are mostly stuck in 2-3 week long downtrend channels after peaking anywhere from 1-3 weeks ago. The six names that we have reported on multiple times since early April were able to end the week with bounces off the 50-dma as was the case with memory makers Micron Technology (MU), SanDisk (SNDK) and Seagate Technology (STX) while semiconductor equipment maker Applied Materials (AMAT) is now hanging between 10-dma resistance and 20-dema support after a very sharp four-day sell-off leading into Tuesday of this past week. Taiwan Semiconductor (TSM) remains a short entry just below 20-dema resistance, like MU, while Nvidia (NVDA) regained its 50-dma on Friday after bouncing off 200-dma support earlier in the week. It posted a five-day pocket pivot at the 10-dma and 20-dema on Wednesday and then another five-day pocket pivot on Friday as it cleared the 50-day line.
Intel (INTC) is showing clear signs of topping as it has evolved into a classic Late-Stage Failed-Base (LSFB) short-sale set-up. The stock broke out in late Junee before sputtering back below the base breakout point. It then attempted to re-breakout attempts attesting to the persistent FOMO-like animal spirits that have embodied the AI theme with the most recent iteration in the semiconductor space. INTC then broke below 50-dma support on Tuesday where it was shortable at the line and then again shortable when it reversed at the 50-dma on Thursday.
While semiconductors saw some buying interest at the end of the week, albeit on light volume for the most part, they were likely buoyed by the U.S. listing of Korean high-bandwidth memory chip maker SK Hynix' (SKHY) American Depository Shares (ADS). These began trading on a when-issued basis on Friday under the symbol SKHYV. The shares were priced at $149, opened at $170 and ended the day at $168.01. It will commence regular way trading on Monday using the symbol SKHY.The euphoria in SKHYV that likely kept oversold semiconductors buoyant into the end of the week did not spread elsewhere among recently broken down AI Data Center leaders such as the six shown below and which have reported on since early April. FuelCell Energy (FCEL) was the most recent name among these that we have reported on as it posted a pocket pivot two weeks ago. The stock has since failed on its ensuing breakout attempt and has actually triggered a breakout-failure type of short-sale set-up as it broke 20-dema support earlier in the week.
Quantum computing names, which often shine under the general leading-edge halo of AI-related semiconductors and the like, also remain quite moribund. GlobalFoundries (GFS), D-Wave Quantum (QBTS) and Rigetti Computing (RGTI) were on fire back in May when the U.S. government announced it would be throwing $2 billion at various quantum computing concerns, including these three and others like International Business Machines (IBM), which received fully half of the government handout while QBTS and RGTI each received $200 million. While that triggered some short-lived upside FOMO at the time, then ensuing moves have since broken in the worst possible way as all three stocks now trade below their 50-day moving averages.
Small modular nuclear reactor makers, the theoretical solution to AI Data Center power needs, also continue to languish. These three names, Nano Nuclear Energy (NNE), Oklo (OKLO) and NuScale Power (SMR) all remain firmly within downtrends since peaking in October 2025. While these names have had many short-term upside pops that in some cases have been playable as very short-term momentum swing-trades, these stocks continue to see their share prices compress from the October 2025 highs when NNE was trading at 60.87, OKLO at 193.84 and SMR at 57.42. There is no AI data center power boom going on here as these stocks are currently -69%, -74.8% and -84.25% below those October 2025 highs, respectively. They also illustrate, why
When one looks at the broad AI space in terms of the various groups and individual stocks that have had prior strong price moves as interest in the space has grown, we see that arguing over whether AI is in a bubble or not is moot. Other than semiconductors, most of these names have topped and declined significantly, some more recently than others. Semiconductors, as the latest iteration of AI euphoria, may be the proverbial last shoe to drop, so remain objective and do not allow yourself to be influence by the remaining AI hype that is out there, the latest incarnation of which could be the commencement of trading in SK Hynix (SKHY) on the U.S. markets via its newly-minted ADS.As we noted during Wednesday's Live Market Webinar, anyone long semiconductors was likely stopped out days ago as these stocks came apart at the start of July. If you study the six semiconductors shown earlier in this report you will note that they have followed the 20-dema for many weeks now, invoking the Seven-Week Rule using the 20-day line, but have since violated 20-dema support, triggering final selling guides and trailing stops. It is now a matter of seeing whether new bases begin to form or the stock simply roll over to lower lows. For now, investors should naturally be holding decent amounts of cash as selling guides for leading stocks, particularly the formerly leading AI-related semiconductors and other big-stock techs have been triggered.
The Market Direction Model (MDM) remains on a BUY signal.