Four of the most heavily traded AI semiconductor stocks just hit “extreme exhaustion” readings on a composite technical model that has historically preceded sharp reversals.
Qualcomm Inc. (NASDAQ:QCOM), Advanced Micro Devices Inc. (NASDAQ:AMD), Micron Technology Inc. (NASDAQ:MU) and Intel Corp. (NASDAQ:INTC) all printed scores above 87 on Jordi Visser’s exhaustion model. Those are the four highest readings in the AI Macro Nexus universe of more than 100 names.
Visser, head of AI Macro Nexus Research at 22V Research and former chief investment officer at Weiss Multi-Strategy Advisers, said in his latest weekly video he scaled fully out of his Micron position in response.
“Definitely out of all of Micron,” he said.
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The exhaustion score is a 1-to-100 composite that combines several technical inputs – such as the RSI on both the 14-day and 5-day timeframes, Williams %R, the stock’s 20-day position relative to its range, 20-day and 50-day extension from average true range – into a single reading.
A score above 75 means the stock is statistically stretched across most of these measures simultaneously. The reading does not predict the timing of a reversal. It quantifies how far a name has traveled from its normal trading range, and historically how vulnerable that makes it to a sharp pullback when the next catalyst arrives.
The gap Visser’s exhaustion model is highlighting is between fundamentals and price velocity.
The earnings justify higher prices. They do not necessarily justify the pace at which prices have arrived at those levels.
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