Charts to Watch: SPX, RDDT, GOOGL

Nicole (0:01)

It's time now for Charts to Watch. Patrick Ciummo is with us, Senior Manager of Trading Services, Charles Schwab, watching the S&P 500, which has been hit hard this week here with the down arrow, but I'm reminded that last Tuesday, we closed above 7,800, and we had a high of 7,844. Now we're at 7,644, right? We're 200 points off the high, which was about a week and a half ago. Your thoughts on the charts, what do they tell you?

Patrick Ciummo (0:29)

Yeah, it's moving quick, Nicole. Thanks for having me this afternoon. And I know we're short on time, so I'll try to keep it quick. We were at 7,800 not too long ago, and drawing my charts today, trying to make sense of all this, I found a pretty decent ascending triangle here, and it looked like it was gonna challenge that resistance level around 7,800, and then curl to the downside. Got below its 20, its 50-day movement average, and as I was drawing it, it's getting very close to the bottom of that channel. So if you are using patterns to measure moves, if this is to reverse and get back to the upside, that's about 500 points from the August low, we'll say, into the recent highs. So 500 points up would get you to about 8,300 to the bullish side, but right now, it's feeling pretty bearish. You got that 200-day movement average below, and the RSI right now is crawling over. It's about 42 last I checked. Bullish technicians like to see it stay above 40, so we'll see if we can hold on to that before the weekend.

Nicole (1:32)

All right. Let's take a look at Reddit because at the end of the month, October 29th, we'll hear from the company for the earnings right now. The stock's down 3.5 percent. Some of your thoughts here for the week, same, 3.7 percent. So today is really the big sell day on Reddit. What are your thoughts?

Patrick Ciummo (1:49)

It is. Reddit hit my volatility scan today. So looking at it, Reddit does have earnings next week and it jumps significantly. If you look at the expiration, I think it's October 23rd, you're showing like 67 percent implied volatility with a measured move around 11 points to the up or downside. You jump over to October 30th and that's about a 100 percent implied volatility last night. Checking about 22 points of up and downside move. So when you're looking at this chart, very simplistic. It's stuck underneath the 200-day moving average. It's stuck underneath its VWAP from its all-time high, that pink line.

There's a channel right there around 140 to 145

That could potentially hold before earnings, but there's a lot of volatility. This has about 15 percent short float. So when it tests these level, expect some type of fluctuation. You don't have to play it. You can set alerts for this and step aside, maybe alert at 165 and then alert down at 139 and see how it plays out.

Nicole (2:51)

All right, last but not least, looking at a Mag-7 name and that's Alphabet. Some of your thoughts here on this name.

Patrick Ciummo (2:58)

Yeah, this chart actually had a very similar kind of setup to Reddit and might be a reason is that there's a business arrangement between Google and Reddit. Not sure if most folks know that Google pays Reddit a fee to license their chatter inside to train their AI model. So when you look at Reddit versus Google, the charts kind of line up but Google is on a more bullish perspective. The 20, the 50, and the 200-day moving average which aren't shown are aligned, but it's sitting directly on that 200-day moving average in white. You have that red line, that VWAP from the all-time high price bearing down on it. What's interesting, you do have a decent level there, from 330 to 315

That orange line, a little precarious, why is that there? That's a 252-day moving average, 252 trading days in a year. A lot of times when you get whipsawed around these levels, that number will show up. Business analysts, 63 days in a quarter, 252 days in a year. So give yourself a little bit buffer. Same thing with this, you could use it as an alert trade and just watch it play out.

Nicole (4:06)

Look, we have, thank you so much. It's great to see you. Patrick Ciummo, great to see you. Thank you so much. Senior Manager of Trading Services at Charles Schwab.