1/ $MEDP
2/ TSLA
3/ NVDA
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1/
$MEDP
For the better part of the last two years, market participants have focused on the massive Capex dedicated to the build out surrounding Artificial Intelligence. Even those not living and breathing the stock market day to day have heard rumblings about the next iteration of technology and what it might mean for the future. Thus far, the average person has probably played with ChatGPT or Microsoft Copilot but might be wondering what all this hype is about. Their lives likely aren’t all that different today as compared to two years ago before AI was a household term. Where is the next big thing and how long will it be before this new technology makes it to the mainstream?
If you are a technical analyst, I have news for you. It’s already here. About a year ago I was fortunate enough to be asked to be a beta tester for a product called “Pattern Finder” designed by Ophir Gottlieb and his team at CML Pro. Since testing the product, it has been a mainstay in my technical analysis toolkit. The following charts are created using Pattern Finder and will give you a glimpse into how Artificial Intelligence is already being put to work for us as market technicians. I am not in any way compensated for anyone who may sign up for their own subscription.
This first chart is of a company I hold in our quality growth portfolio for clients of JSPM LLC. Medpace Holdings Inc. $MEDP. Any stock held in this particular portfolio is first vetted and has to meet stringent fundamental requirements for inclusion into my investible universe. But, being this a technical analysis publication I will stick to technicals. You can see that MEDP has spent the better part of the last two years in an up trending channel pattern. And those trendlines representing the bottom channel and top channel? They were drawn by AI. As were the percentages of profit and loss zones based on criterion I have selected within the software. In managing positions and position sizing, you can easily see zones where you may wish to add to the position, and other zones where if you are oversized you may wish to trim. For the Fibonacci following technicians, it draws those for you too.
2/
TSLA
Next, since Tesla made news today post earnings, let’s see how Pattern Finder creates a chart using the same 3 year weekly time frame. Those familiar with pattern analysis may notice a coiling triangle pattern shaping up. Those often are a signal of built up pressure which will soon release, either to the upside or the downside. Active traders will want to keep an eye on this one for a major price move in the coming months.
3/
NVDA
Okay so this thing can draw patterns and profit and loss percentages for me. That’s nice and all but what else? For those who use relative strength, Pattern Finder compiles ratings based on the individual stock’s relative strength over multiple time periods against their sector, industry group, and entire market. The RS scores for NVDA as you might imagine are quite strong. Those following Up / Down volume have it at their fingertips all within a couple of clicks.
The software does so much more than what I can include in a single post, but I will end with what I consider to be the most powerful feature yet. Taking that same NVDA chart, with one click of a button you can ask “AI” what it thinks of the chart in question. The following is a read out complete with bullish and bearish analysis as well as an entire trade plan based on the chart and time frame that you select. This is a new feature currently in Beta, but you can already see the power of blending artificial intelligence with technical analysis. In sum, while the world waits to see what’s next when it comes to this new technological revolution, market technicians are already graced with AI being put to use in the world we hold so near and dear.
Charts.
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Originally posted 25th October 2024
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