Charts to Watch: SPX, AXTI, TSLA

**SPEAKER_1** (0:00)
Joining me right now, Kevin Horner, Senior Manager, Trading Services, Charles Schwab. I'm so glad you're with us, looking at the S&P 500 It's pretty much flat for the week. What are you watching when it comes to the index? How are you feeling about the levels?

**Kevin Horner** (0:14)
Good afternoon, Nicole. You know, I'm like many traders, trying to digest this little sideways move we've had now for the better part of the last five or six sessions, and take it as bullish, to be quite honest. I mean, the breakout from the consolidation was notable. We've seen the index kind of just go sideways, like I said, no real upward move, but it sure looks like a bull flag at all time highs. 7,800 resides above us. Last time you and I spoke, we talked about the depth of this consolidation triangle being about 380 points and how that may allow bullish traders to target the ballpark of 8,000 on the SPX. I think that's entirely valid. If you're looking for trend management in the SPX, the 20-day moving average seems to be a bit slow for many traders right now.
That number coming in at around 75.55 and here we are 200 points above it. Now if you move with the 10-day moving average instead, that comes in around 76.70, only 1% lower than we are right now. So traders under the 10-day moving average might choose to lighten up, take a little off the table if we do see that type of a move here, Nicole. But ultimately it's really hard to be angry, mad, disappointed in the S&P given the moves we've had year to date up nicely at 13.3%.

**SPEAKER_1** (1:35)
Oh, without a doubt. Let's talk and turn our attention over to the semiconductor space. You have a name that is standing out. Tell us a little bit about this.

**Kevin Horner** (1:44)
Sure. What we're looking at here, AXTI, big move to the downside following a peak in the neighborhood of 140 What I've drawn in on this chart, Forest Nicole, is a deeply falling wedge that came all the way back to the 200-day simple moving average. Today, that's just under 50 bucks. But what's most notable about the move now is getting outside of that falling wedge. Did so on big volume, got above the 20-day moving average nicely, held it for 2, 3, 4 days, and then cleared the 50-day.
Now, today's price action actually enabled a short-term test with the lows today, coincident with the 50-day. Today's intraday low, 73.10.
It got down and then bull stepped in. We had a lot of buyers willing to do so at that $73 level. Now, near-term, what we're looking for in terms of continuation is that $89 level right above us. Horizontal resistance. This is key because one, it's not very far off. It is 10 points. It still makes it a possible trading target in the near-term. But a move through 89 is likely to bring bulls really back into this one and give them an opportunity to possibly target those prior highs around 140 This is a really positive move of late. The broken downtrend, the recapturing of those two moving averages, the 20 and then the more intermediate 50 day, certainly gives traders a couple of ways to manage anything they're looking at relative to AXTI if they are trying to be on the long side here.

**SPEAKER_1** (3:26)
It did get that jump up after its earnings. First of all, everybody should understand this stock is up about 3,500 percent over one year. But on the latest quarterly report at the end of July, it had a beat, the guidance beat the concessions estimates, it also swung to a profit, the revenue was on a rise. So overall, plenty to give this name a boost. Month to date, up 30 percent right now. Last but not least, let's take a look at Tesla. 52 week low on July 29th, but has been trending higher. What caught your eye when it comes to Tesla?

**Kevin Horner** (3:59)
Well, the first thing is, one, I so rarely come across charts where I feel like the bear side tells maybe a more obvious story than the bull side. Unfortunately, that's Tesla today. It's been under pressure a lot this year. We're down 27 percent year to date. It was beaten up following the earnings announcement and then made a 52 week low at that ledge, 297 We've gone up for almost three weeks, but where have we rallied? Right into the 20 day moving average. Now, yesterday's high represents the highest trade post earnings and today we're trading under the low of yesterday's high. So this is the spot where some traders would look and say, yeah, a close under yesterday's low could signal the end of this 11-12 day rally that we've seen off of those lows. Now, if what I've drawn in is valid as a bear flag, then the potential target is down there around 242