To The Moon

Today's trading session concluded with mixed results, despite the overall gains for the week. The S&P 500 edged up by 0.2% from yesterday, marking a 1.9% increase from the previous Friday. Conversely, the Nasdaq Composite experienced a slight decline from yesterday, although it still managed a weekly rise of 1.1%.

Preliminary University of Michigan Index of Consumer Sentiment for May

Market dynamics shifted following the release of the preliminary University of Michigan Index of Consumer Sentiment for May, which fell to 67.4 against expectations of 76.5.

This report also highlighted a rise in inflation expectations for the coming year, increasing to 3.5% from 3.2%.

Significant Movement Seen In Treasury Yields

Reacting to the sentiment data, Treasury yields saw significant movement. The 10-year note yield rose by six basis points to settle at 4.50%, while the 2-year note yield also increased by six basis points, closing the week at 4.87%.

10-year note yield is above the 50-day period and we could see that the current value at around 4.50% is above the support at 4.43%. This could mean the sentiment push should come on again on Monday (13 May 2024).

Consumer Staples and Semiconductor Winners Last Friday (10 May)

Some indices did experience some pull back from session highs, but several sectors and stocks ended the day positively. These 3 sector, Consumer staples sector rose by 0.6%, Information technology and financials both increased by 0.5%. Health care sector saw a modest gain of 0.2%.

We saw the consumer discretionary sector experienced the largest drop, declining by 0.6%.

The semiconductor industry received a boost from $Taiwan Semiconductor Manufacturing(TSM)$ , which surged 4.5% to close at $149.26 after reporting a significant revenue increase in April. This helped the $Philadelphia Semiconductor Index(SOX)$ to gain 1.0%.

TSM Trading Above 50-day and Strong Demand from KDJ indicator

TSM has a good correlation to SOX, and I feel that it is important to look at the potential that TSM could present, if we look at the chart below, we could see that TSM is trading above the 50-day period comfortably and we need to understand that AI revolution is moving towards consumer focus.

What it mean is that companies training AI model are now concerned on how fast and can it be cheaper to get inference (term used to get result) from AI model to consumers? So is GPU demand still relevant?

I personally have been working on various AI model and now it has improved tremendously by the AI community and fellow data scientists that AI model can be trained using cheaper and less compute resource. And now inference also take less compute resource.

How come this is possible? This is because companies are looking into their own purpose-focused chips for their specified model and used cases.

This might explain why we are seeing very good increased demand on the KDJ chart, and it is increasing with a nice range, so if this continue, we could see higher stock price move.

At the time of writing, TSM is having very nice move in their taiwanese stock exchange.

Summary

I would think AI revolution have moved beyond monopolizing of certain technology, the next opportunities should be in security and other complementary services.

So if you are interested to trade in AI revolution, I think it is high time we looked at some of the companies who are doing well supporting AI.

Appreciate if you could share your thoughts in the comment section whether you think AI revolution changes is helping TSM to gain market share and soon we will see more companies complementing this change flourish as well?

I am doing some research and analysis, will share more on these companies when time is ready.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.