The Big 3: CBRS, VLO, TSLA

Welcome back to Trading 360. I'm Marley Kaden. It's time for the big three. We've got three stocks, three charts, and three trades for you. Rick Dat will take us through the charts. Here to take us through the trades today, Charles Moon, stock strategist at Prosper Trading Academy. Charles, great to have you on. And we've got the NASDAQ touching a record high. We've got the S&P pretty sideways uh to start the day. A mixed picture here otherwise in terms of the market. We've got the UN General Assembly kicking off ahead of the Trump Shei meeting on Thursday. Potentially a busy week here. How are you looking at the markets this week? >> Well, uh, we've seen AI firm up. We've seen the markets firm up. We were basically a stone throws away starting this morning in both the NASDAQ and S&P 500 from all-time highs. And what I've also noticed is that when we've seen recent rallies, let's say in AI, we've seen a bit of a contrarian play in the software as a service. So, we've seen one sector lift, one sector drop. But lately, I've been seeing more of a broad rally and AI, hyperscalers, uh, software as a service, while not every stock in every segment was railing. when I'm starting to see kind of the broader lift, it really gives the idea that the market is poised, especially being this close to all-time highs to wanting to see if we could break out. So, if that's in the picture, I think there's some great upside in a lot of different names. And that's kind of how I surrounded my signals today that I'm going to be sharing with you in the big three. >> All right, so let's dive into your first pick in the big three and and where you potentially see upside for Cerebrris here. I know they're expanding uh their data center buildout in Finland, but still some uh persistent concerns about customer concentration with this name. So, how are you looking at Cerebras? >> Well, you know, we when whenever we see stocks, especially especially a a high beta name like this one start to find a floor, it's been finding it at 160, what we essentially are looking for is a basing pattern bullish breakout, and we're starting to see it. Now, for me, what's really critical for the stock is to remain and hold this 200 to 202 price. And if it does, I like the October 2nd 210 strike for 775 or lower. Now, you don't have to play with this with a big risk parameter, only around 35%. I believe the initial upside target should be around 222, but the potential breakout could carry it to 260, which in turn could easily hit over 200% returns. We actually saw it really performing strongly this morning before uh President Trump got on the podium and started to speak and then of course everything started pulling back but it's still holding above this level and this is definitely name that should be on retail traders radars. >> Yeah and it's starting even to come back too just since the show open we were down a little bit more than a percent now we're down about a 4/10en of a percent. So Rick, as you look at the technical setup uh for this name, are you also starting to see the beginning of a basing pattern and the potential for a breakout? >> Yes. Uh we do seem to be starting to push above a trend line here. So if you look after our earnings event that we had in August, we had our high subsequent high here, further highs here. Now we are starting to push above that downward sloping trend line. You can also say, well, we've had a pretty consistent low that we established here in terms of our close. Uh although we did make intraday lows beyond the 168 level, for the most part, we have held pretty firm there, even making probably a gradually very slight higher lows. So you can couple that with our upward sloping short-term trend line in white here. Uh so an interesting setup here as we uh digest whether or not this could be a breakout that could have some legs. So we had lows here and then we had a you know a period of highs. We did break above that point here. Uh but now uh that that level near 205 uh stands out potentially as a noteworthy area to clear. So uh when we think about uh oops our our we lost our chart there. Give me one second here. Uh we uh uh think about this one in particular uh what we would see next when we do focus on our moving averages. Excuse me there. Um what we have next is a situation where our simple moving averages here are our our 20 and our 50 here our 20 in olive uh this like greenish color 1908 85 we are just breaking above our 50-day EMA near 200 though. So these are simple moving averages because we don't have our full uh period of trading activity RSI breaking above the 50 midline here and breaking above our downward sloping red trend line. volume profile shows that the heaviest trading area of all here uh comes in between this node between about 200 to 233. 205 is where the point of control is. Uh so we find ourselves right about at this very heavily traded area. If we do start to break above that level near 233, we could see very fast moving prices. >> All right, and right now we're at 20647. Uh down about a percent again. Uh but as Rick just highlighted there, they've only been public since miday. So, uh, not a not a full one-year chart to look at when we look at Cerebras, but this next one, we've we've got quite a few years of trading to look at. We talk about Valero Energy. We are seeing oil lower. So, we're seeing Valero down a bit on the session today as well. We're down about 2%. But how are you looking at Valero right now, Charles? >> Uh, honestly, I the trend has been so incredible. So, it's been pretty noteworthy whenever there's been any kind of a pullback in this name. And that's really what I'm looking for, just a kind of quick rebound play. I love the entry here at a key technical level. And I would almost play this as a fast in-n-out entry. Uh certainly crude is down and has been weakening in two two factors. one uh it looks like Saudi Arabia is ready to get back online um in relation to the Houthis attack when they attacked that pipeline that was their pretty much their only outlet uh outside of the straight of Har moves and number two you know the market chatter that um Iran may potentially be willing to uh make some concessions in opening the straight of her moves if the United States backs off. Now, I don't necessarily buy it, and this is why I actually do like the kind of diptorip idea here. So, I'd be looking at the October 2nd 395 strike calls at 850 or lower. Uh the stop would have to be a little bit more than the the server trade at 40%. Uh there's potential that this stock will stall out at around 393 which is a small gap fill but if it does rally we could see a quick jump to around 415 420 and that could make this easily over 100% return if the stock returns to or near those uh all-time high levels. So I like the diptorip idea here. Um just trying to take advantage of a quick bounce. >> All right. So then let's look at the technicals here. Obviously, as Charles was just highlighting there, you know, you can't help but see the trend here when you look at Valero's chart, but we have a potential dip buying opportunity here. So, what are you seeing in the technical setup? Okay, >> after an exciting sneak preview of this chart, we can talk about it now for real. A rising wedge type shape here. Our two boundary lines converging toward each other do seem to have been broken at this point here. Typically, this is regarded as more of a bearish type setup. I always say that with a very big grain of salt here because it can really go either way. It's not set in stone that it's going to break downward. In this case though, it does seem like we are pushing below this trend line here. We have not quite filled the gap near 373 at our green line though. We did hit these highs 41904. So, we also had a repeated ceiling here a bit below these levels near 351. Another old high stands out here near 320. These are quite far away at this point here, but just calling out the uh notable horizontal levels as I see them. So now we have slipped below our 5-day exponential moving average in dark blue that coincided with our trend line. So the breakout to the downside has even perhaps a bit more emphasis than it may have appeared at first. Our teal 21-day exponential moving average at 378 does seem to have been a place where we found a foothold so far today. Uh so we did make some intraday lows beyond that point, but we're hanging on above that level here. So that stands out as another important level to watch out for heading into the close. RSI we can see that we have broken below our trend line and broken below that 70 threshold that represents the overbought area. So momentum is starting to break down somewhat. We still remain above the 50 midline but has taken a bit of a hit at this point here. Volume profile we have some pretty clear nodes to think about. One here 298 to 311. One here 341 to 353. and also the one in which we find ourselves the perhaps the smallest one but still it it kind of stands out on our chart here 380 to 392. So if we were to break a bit below 380 that opens the door to retesting some of these old lows. Notice as well we did have a volume spike recently uh fairly heavy volume during this upswing here. So uh notable as well uh that there were takers at these elevated levels of trading activity. All right. And right now, Valero is down 2% as we're seeing oil down around $91 a barrel as Charles mentioned. Uh looking like that Saudi pipeline may be coming back online with less of a delay than originally thought. I am very curious about this last one though, Charles. You've got Tesla in in your big three here. Uh how are you approaching Tesla right now? >> Well, it's a bit speculative quite honestly. uh there's, you know, some pent-up resistance built around this 380 price. I think the real breakout zone is most notably at around 384, but there's a level of persistence that I'm seeing and the price action makes me want to be bullish. Uh the the point of recovery after the pullback today really showcased that there was some short-term buyer demand even at these uh recent elevated levels. And you know, it's interesting because this has been a contentious point uh historically in the you know, in recent weeks where uh we've seen a lot more risk off trading as opposed to risk on trading. So uh I don't know if it's going to break out, but I think it's poised for a decent one. Uh pretty similar to what we saw with Google on Friday. Um again, this is really close to either being a great trade idea or one that immediately falls and just smacks you out at a loss. So I do say proceed with caution but uh I am anticipating that breakout run to 395. So I like the October 5th contract. The 395 strikes at 550 or lower. Uh stop would be at 50%. The upside would be around 100% return. Uh what it does at the 200 simple day uh 200 day simple moving average is going to be critical because getting above that point is the kind of break free zone. It's very similar to what we've seen with Meta rising on the Muse news where out of nowhere, you know, they were fighting with the 200 simple moving average just a month ago and now they're knocking on the door of their all-time highs. So, uh I don't think Tesla's going to make that kind of a move, but it it really wouldn't surprise me that they knock on the door of that 200 day simple moving average. And if they proceed through that level, they could jump as high as 420 in the near term. All right, Rick. So, we're looking for a minimum of about a $30 move to the upside. Are the technicals showing that they could be ripe for a breakout? >> Well, by one measure, we are having a breakout already. You can see that we had our downward sloping trend line with our white line here. We have broken above that level. We remain above that trend line. However, we did not yet take out our relative highs near 384. Also, there's this repeated floor that we saw at our next red line near 391. So we did fill the gap here. Our green line near 373 that now stands out as support. So our our trend line our downward sloping trend line has been been breached at this point but we also have some work to do in terms of crossing above these significant horizontal levels that stand out. So our 251day EMA in this case uh so exponential moving averages rather than simple moving averages. Exponentials are more weighted toward recent price action so they can react faster here. uh still every moving average is inherently a lagging indicator because it's based on prior price activity here. So just that after that quick uh you know example here our 2501day EMA in orange representing one year 37736 price is right about there now. So if we were to push above this level it stands out as another significant threshold to cross. It also lines up pretty closely with our downward sloping trend line. So that would be interesting and that could add further fuel to a potential breakout here. RSI trending upward kind of a a loose uh upward sloping green trend line there kind of of of a very modest slope but we are making new relative highs above our recent peaks as well. So the bulls would want to see a crossover above 70 for further uh bullish confirmation here. So volume profile here the next close closest node 392 to 409 is uh what we have uh uh to the upside here. Not really too terribly much in terms of heavy trading activity below these levels here. So we the bulls would want to see again a recapture of this volume node around that 400 level for further upside as well. >> All right, right now we are looking at Tesla higher up about a half a percent at 37690 looking for a move north of 400 for that last trade. Charles, always great to have you in the big three. Really appreciate you taking the time to be with us today. Charles Moon and of course Rick Dat, our lead market technician for always breaking down the charts for us.