GAME PLAN REVEALED: NVIDIA's Key Level, Semis Crack & Intel News

On a Friday morning marked by mixed economic data, the market continues its delicate dance near all-time highs. While slightly weaker retail sales figures were released, the consumer remains a pillar of strength, largely propped up by a robust stock market. In this morning's GAME PLAN, Gareth Soloway, Chief Market Strategist at Verified Investing, cut through the noise to deliver a no-nonsense analysis of the critical technical levels, emerging sector weaknesses, and major news events shaping the trading landscape.

The session revealed a market of contradictions: major indices are testing crucial resistance while the semiconductor sector, the engine of this year's rally, is beginning to show significant cracks beneath the surface. From government intervention rumors at Intel to key trade setups in beaten-down chip stocks, let's dive deeper into the key takeaways.

The Semiconductor Shake-Up: Cracks in the AI Armor

The NASDAQ's underperformance today is a story written by the semiconductor sector. While the titans like NVIDIA continue to hold their ground, the ancillary players in the AI space are beginning to falter, sending crucial warning signs to attentive traders.

The primary culprit today is Applied Materials (AMAT), which took an "absolute beating" after reporting earnings. While the numbers were adequate, it was their forward-looking guidance that spooked investors. This isn't an isolated incident. As Gareth noted, "we're seeing more and more of these chip companies, right? These ancillary plays in the AI sector that are seeing massive, massive drawdowns on earnings."

For traders, this creates opportunity. Gareth identified a precise, high-probability setup on AMAT for a potential long trade. A confluence of two key technical levels—a descending trendline and a flat support line from a former gap fill—creates a support zone between $157.75 and $155.75. With the stock trading around $161.70 pre-market, a flush into this zone could yield a quick bounce. However, the strategy here is critical. This is a tactical day trade, not a long-term investment. Gareth cautioned, "imagine the stock market just has a run-of-the-mill 5% drop, where does AMAT go at that point? So, it's not really a mid to long-term swing trade."

The AMAT story is amplified by the recent collapse of CoreWeave, a recent IPO that plummeted from $150 a share to $93 in just a few days—a textbook example of a bubble bursting. These events are the tremors before a potential earthquake. The "leading stallions" like NVIDIA and Broadcom are still holding up, but the weakness in the broader semiconductor ecosystem is a clear and present signal that traders must monitor.

NVIDIA: The $4.5 Trillion Trendline Holding It All Together

In a market showing signs of fatigue, one chart stands out as the most important indicator for the entire semiconductor sector and, by extension, the broader market: NVIDIA. This $4.5 trillion behemoth is trading along a critical upsloping trendline that originates from its April 7th low.

This single line on the chart is, as Gareth described it, "the crux of the semis." Its significance cannot be overstated. Yesterday, the stock opened below this trendline but managed to recapture it by the close, demonstrating the market's fierce defense of this level.

The thesis is simple and powerful: "As long as this does not break, the markets are very unlikely to have a big down day or any sort of major correction. Once it breaks, okay, now you start saying, okay, it's broken. The biggest play, the biggest market cap in the market has now broken a key support. This could be a signal of a coming market correction."

This makes the NVIDIA chart a must-watch for every investor. Its resilience is propping up market sentiment, but its vulnerability represents the single greatest systemic risk to the current rally. A confirmed break below this trendline would be the loudest alarm bell yet that a significant pullback is imminent.

Government Intervention and Big Money Moves

Two major single-stock stories are capturing headlines: a rumor of government intervention in Intel (INTC) and a massive institutional bet on United Healthcare (UNH).

Late yesterday, rumors surfaced that the U.S. government was considering taking a stake in Intel. This sent the stock popping into the close. While government stakes in corporations are not unprecedented—Gareth cited the 2009 interventions in GM and Ford—those were under extreme duress. Intel is not in a "do or die" situation, making this a curious development. It raises critical questions about market dynamics: would a government-backed Intel receive preferential treatment, potentially harming competitors like NVIDIA? For traders, the immediate opportunity lies in the charts, with Gareth identifying a potential short day trade setup at a gap fill level around $25.90.

On the other end of the spectrum, United Healthcare (UNH) is surging after it was revealed that Warren Buffett and legendary hedge fund manager David Tepper have both taken substantial positions. The stock, which had been severely beaten down, ripped higher on the news. This move validates the "value play" thesis that Gareth has been discussing.

Interestingly, even in the face of this overwhelmingly bullish news, there are still tactical trading opportunities. Gareth pointed out a potential short day trade setup for aggressive traders at a high pivot around $326. This highlights a crucial distinction for market participants: the difference between investing and day trading. While holding a core long position for the long-term recovery, a skilled trader can still capitalize on short-term pullbacks. As Gareth explained, "Day trading, you're jumping in for a $1 or $2 or $3 pullback. You grab your money and you run."

The Market's Tightrope Walk at All-Time Highs

While single stocks provide volatility, the major indices are painting a picture of a market straining against overhead resistance. Both the S&P 500 and the NASDAQ 100 are at critical inflection points.

The S&P 500 has inched above a parallel trendline that dates back to October 2023 but has failed to confirm a breakout. It is also simultaneously testing another major ascending trendline from the same period. Yesterday, it touched this line and pulled back, closing essentially flat. The market is clearly struggling at this technical barrier.

The NASDAQ 100, pressured by semiconductors, is also hitting the top of a parallel channel. The takeaway is clear: the market is overbought and testing significant resistance. Does this guarantee a reversal? No. As Gareth acknowledges, "We've seen the markets defy gravity." However, the probabilities are shifting.

This is where discipline becomes paramount. "We all know it's eventually coming where we'll get a 5, 10% pullback and my job here is to watch these key levels to see, do we get those topping tails, those reversal signals, those hits of those parallels where it could begin." The goal is not to predict the exact top but to be prepared and not get caught off guard when the inevitable correction arrives.

The Slow Decline: De-Dollarization and Its Long-Term Impact

Zooming out from the daily price action, the U.S. Dollar chart tells a multi-year story of a slow, grinding decline. Since its peak in 2022, the dollar has been in a clear downtrend. This aligns with the broader narrative of "de-dollarization" that gained traction in recent years.

However, Gareth provided crucial context to this theme. Unlike the overnight collapse some predicted, this is a glacial process. "I always came on these game plans even then and said, guys, it doesn't happen overnight... this is something that takes literally decades to occur." Countries are slowly diversifying their reserves away from the dollar, a process accelerated by trade wars, but a reserve currency doesn't vanish in a year.

This slow-motion trend has profound long-term implications. A steadily weakening dollar is structurally bullish for assets denominated in dollars, particularly hard assets. This provides a long-term tailwind for both gold and Bitcoin, even as they experience their own short-term volatility.

A Lesson in Technical Nuance

The final segment of the GAME PLAN offered a masterclass in the subtle but critical details of technical analysis.

First, Bitcoin experienced a "nasty drop" yesterday, confirming a double top pattern. The key takeaway was the nature of the reversal: a large, bearish candle that gives the chart a slight negative bias. While a double top can resolve bullishly through a bull flag, the powerful reversal candle suggests sellers are currently in control. The weekend price action will be crucial to see if this bearish momentum continues.

Next, the natural gas chart provided a fantastic educational moment. After breaking a key trendline, the price is now retracing back to retest it from below. Gareth posed a question: is this now major or minor resistance? The answer lies in whether the breakdown was confirmed. Since natural gas never had a daily close below the line, the breakdown wasn't confirmed. Therefore, the trendline is currently only minor resistance.

This is a game-changing concept. "These little tidbits, by the way, are epic in terms of the difference makers between great traders and mediocre traders." Major resistance (after a confirmed break) has a high probability of rejecting price. Minor resistance still favors rejection but offers a much lower barrier for price to break back above. Understanding these nuances is what builds a true trading edge.

Conclusion: Navigating a Market of Contradictions

As we head into a Friday with options expiration—a day often prone to "wacky stuff"—the market presents a complex picture. We have broad indices straining at resistance while the underlying semiconductor sector shows foundational cracks. We have bullish long-term value plays like UNH offering bearish short-term day trades. We have the world's most important stock, NVIDIA, holding the fate of the rally on a single trendline.

Navigating this environment requires shedding the emotional narratives pushed by mainstream media and focusing on what the charts are telling us. By identifying key levels, understanding technical nuances, and maintaining discipline, traders can find high-probability opportunities and protect themselves from the inevitable volatility ahead.