May 20th US Stock Special Analysis || Tesla's bottom structure, Nvidia's earnings report and stock split pre-run

Today, I'll take some time to systematically explain the U.S. stock market for everyone:

At the beginning of 2024, I mentioned that if you want to make money in the U.S. stock market this year, there are three main themes: AI stocks, Bitcoin-related stocks, and the presidential election year.

1. AI stocks: Primarily NVIDIA (NVDA) and others. On January 19th, we aggressively recommended SMCI at over $300. Then there are application scenario stocks like SOUN and power-related stocks like VRT.

2. Bitcoin-related stocks: We heavily promoted Coinbase (COIN) at 114 because it had a strong bottom structure.

3. This is a presidential election year, so Trump-related stocks like DJT (formerly DWAC) are in play.

These are the big themes. Of course, recently, meme stocks have been the focus. Let’s break them down one by one.

First, let’s talk about last week’s meme stocks.

$Faraday Future Intelligent Electric(FFIE.US) $AMC ENT(AMC.US) $GameStop(GME.US) $Crown ElectroKinetics(CRKN.US) $MicroCloud Hologram(HOLO.US)$AMTD Digital(HKD.US)

FFIE surged 90 times in just a few days. Then a bunch of people came out with post-hoc explanations like Jia Yueting’s personal IP, U.S. restrictions on Chinese new energy vehicles, and the car’s good looks and future potential. For meme stocks, remember one thing: ignore fundamentals and don’t overanalyze. Making money on FFIE is no different from making money on GME, AMC, HOLO, or HKD.

The reason for this surge is simple: Roaring Kitty called on everyone on Twitter to short squeeze. Here’s a screenshot of his latest tweet:

When he first updated the image, we also posted "he is back":

The meaning of this image is simple: when someone suddenly leans forward, it means they’re ready to fight. Based on this, we need to do technical analysis:

For example, FFIE:

(The "bottom fishing" text in the image is automatically displayed by the CD indicator.)

According to the NX indicator (blue ladder) rules, as long as the candlestick closes above the blue ladder, it means the uptrend continues and you shouldn’t sell. But FFIE is a meme stock, and it’s deviated too far from the blue ladder. So we need to switch to a smaller timeframe, like 5 minutes (originally, I said 3 minutes in my video, but since Longbridge doesn’t have a 3-minute option, 5 minutes will do):

(The "sell" text in the image is automatically displayed by the CD indicator.)

At around $3, the CD indicator aggressively signaled to sell, telling us to exit FFIE. Of course, since the blue ladder was still pointing upward, it would be better to wait for it to turn downward before selling.

Now, let’s talk about GME:

These types of stocks are collectively called meme stocks:

Meme stocks. The term "meme" comes from the ancient Greek word "mimema," meaning "imitation." Meme stocks, also known as "internet sensation stocks," first appeared during the 2020 pandemic. They refer to stocks that gain viral popularity due to heightened social sentiment, often driven by online activity, especially on social media platforms. These online communities can dedicate significant research and resources to a particular stock. Meme stocks are frequently discussed and analyzed on platforms like Reddit, X (formerly Twitter), and Facebook.

It wasn’t until 2020 that meme stocks truly emerged, thanks to the Reddit forum subreddit WallStreetBets.

YouTube influencer Roaring Kitty posted a viral video explaining why the stock price of GameStop Corp. (GME) surged from $5 to $50 in August 2020. In the video, he explained that GME was one of the most heavily shorted stocks in the market, primarily by hedge funds. A massive short squeeze would force these funds to cover their positions, driving the stock price up significantly.

While GameStop was the first successful meme stock, it wasn’t the only one. WallStreetBets users quickly identified other struggling stocks with high short interest, such as AMC Entertainment Holdings Inc. (AMC) and BlackBerry Limited (BB).

That’s all for meme stocks.

Second, let’s talk about our big brother: AI stocks.

First, NVIDIA—my crowning achievement. On January 16, 2023, I aggressively recommended buying NVIDIA $NVIDIA(NVDA.US). As long as the blue ladder stays above the yellow ladder, hold:

For now, as long as the blue ladder remains above the yellow ladder, we’ll hold NVIDIA.

This week, the entire U.S. stock market is watching NVIDIA’s moves. NVIDIA is finally making its move:

NVIDIA now has a major catalyst: the expectation of a stock split, which could trigger a classic pre-run rally. For NVIDIA, the outlook is simple: keep riding the uptrend.

NVIDIA’s related stocks include $Super Micro Computer(SMCI.US) $AMD(AMD.US). On January 19th, I aggressively recommended buying SMCI. Many people want to play NVIDIA’s earnings, but the options IV is too high. If you’re considering a straddle (buying both calls and puts), high IV isn’t ideal. If IV exceeds 100, you might want to look at related stocks instead.

Third, let’s talk about Apple.

$Apple(AAPL.US)

From a technical perspective:

(The "sell" and "bottom fishing" texts are automatically displayed by the CD indicator.)

For Apple, as long as the candlestick doesn’t close below the lower edge of the blue ladder, the uptrend remains intact.

Fundamentally, Apple’s performance is tied to:

In Q1 2024, China’s tablet market shipments reached 7.13 million units, up 6.6% YoY, with consumer market growth at 10.7% and commercial market growth at 6.3%. After four consecutive quarters of decline in 2023, China’s tablet market demand saw a slight recovery, driven by New Year shipments.

Fourth, let’s talk about Tesla.

$Tesla(TSLA.US). On December 29th, we aggressively recommended selling because the CD indicator signaled a sell.

For technical trading, remember: when the CD indicator signals a sell, wait for the blue ladder to turn downward sharply; when it signals a bottom, wait for the candlestick to break out of the blue ladder quickly. That’s why we bottom-fished Tesla at around $140 on April 22nd. Tesla might give another entry opportunity this week—watch for the CD indicator’s bottom signal on the 15-minute or 30-minute chart.

Going back to the three main themes I mentioned at the beginning of 2024, Tesla now falls under AI stocks because of FSD.

Tesla (TSLA.O) has been planning to build a data center in China to train algorithms for its Full Self-Driving (FSD) system. Reports suggest the EV giant has negotiated with NVIDIA (NVDA.O) to purchase GPUs for its Chinese data center.

In short: If Tesla is just an EV stock, it’s not worth trading. But if it’s an AI stock, there’s huge potential.

That’s all for today’s analysis. As for the broader market, whether it’s the S&P 500, Nasdaq, or Dow Jones, no top structure has formed yet—the uptrend continues.