Our top sector pick, AI infrastructure stocks, soared all day yesterday in a breakout which looks sustainable at this time. Our #1 official pick of the day, short BYRN, hit our $4 target resulting in a 20% return. Additionally, we notified AEHR at $75 in our Discord in pre-market on a catalyst and notified our exit in the low $80s near the high of the day.

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Yesterday certainly did act like the green signal day which we called for. QQQ surged past the 20DMA led by MU, SOX, and other AI infrastructure stocks.

This resulted in many charts of key stocks to dramatically improve and become bullish in the near-term. A very common pattern across these charts are a break above a key moving average or a move towards a key moving average with an extremely oversold RSI.

As such, we believe the move in AI infrastructure stocks is sustainable and can last several days. However, there is one factor which could throw a wrench in things today.

SK Hynix begins trading today. SKHY (trading as SKHYV for a single session today) is valued at $1 trillion and as we saw with SpaceX, there may not be enough liquidity in the market to handle it. A key dynamic we have recently observed is that the wild sector rotations are due to the simple fact that participants are fully invested. This means if they want to chase one sector or stock, they have to sell something else. So it’s entirely possible that demand for SKHY today can suck liquidity out of MU and other AI infrastructure stocks.

This is probably most acutely an issue for MU and SNDK but can certainly bleed into the whole sector.

We will be keeping our green signal because the charts and the red to green reversal on bad Iran news earlier this week signal a positive inflection point for us. However, that doesn’t mean it will be a smooth ride up. Today could be rocky so caution is warranted despite our green signal.

Today’s Signal: 🟢

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