I called this memory rally back in January…

Now I’m calling the top.

Yesterday SNDK, MU, INTC, DXYZ, and VCX all printed first red days. 

When five names that have run 400% and 500% all crack on the same session, I start looking for shorting opportunities. 

I’ve been trading small caps my whole career. I’ve never seen setups migrate up the price ladder like this. Memory stocks running 4x, 5x, acting like $0.30 chat-pumps on their third green day.

The AI data center build-out drove it, and I was watching every morning when these names hit the top of my gainers list. 

But now that everyone and their grandma is trying to buy these stocks, the risk/reward has flipped to favor the short side. 

Yesterday was the first real sign of a pullback, and it could be one of the best opportunities of the year.

The First Red Day on Memory Stocks

Sandisk Corporation (NSDQ: SNDK) opened near its highs and sold off hard. It traded down to $1,394 intraday before bouncing. The bounce didn’t hold. It’s sitting below $1,500 as of yesterday’s close.

Micron Technology Inc (NSDQ: MU) hit $706 on the session before bouncing back toward $750. Still below $800.

Intel Corporation (NSDQ: INTC) was the most dramatic. It opened down from Monday’s all-time high of $129.44, dropped to $115, bounced back toward $129, and then faded. A 10% range on a name that was up 170% year-to-date.

DXYZ and VCX both had giant first red days alongside the chip names. I’m keeping an eye on all of them for the rest of the week.

Here’s where I need to see these names hold to change my read:

• SNDK needs to stay below $1,500. 
• MU needs to stay below $800. 
• SOXL below $180.

If any of those levels get breached on volume, I’ll start turning bullish again. Until then, I’m watching for bounces to fade and looking for shorting opportunities on the names that can’t reclaim.

I’ve seen peak euphoria end a hundred times. You just don’t usually see it on names this size.

While that plays out, small caps are starting to set up again.

2 Stocks I’m Watching Over Memory Plays

When I see a name that’s been running for months print its first red day, I don’t automatically flip short. I watch the bounce.

A weak bounce tells me the buyers who were carrying the move are stepping back. The stock tests lower, comes up, and the volume on the recovery is thin. When I see that pattern, I start looking for entries on the short side.

A strong bounce that reclaims the prior high tells me the move isn’t done. I wait.

So far, the bounces are staying weak on all five names.

These stocks ran because the memory thesis was real and the AI data center build-out backed it up. But stocks priced all of that in months ago. When the buying exhausts itself, the first red day comes.

Back To Small Caps

Ernexa Theraputics Inc (NSDQ: ERNA) is my number one watch for the back half of the week. Giant breakout playing out. If it keeps holding support, I’m staying bullish and looking for buying opportunities out of bull flag breakouts. I’m also watching for reclaims through the VWAP.

Antelope Enterprise Holdings Limited (NSDQ: AEHL) is another one I’m watching closely. No big high-volume breakout yet, but it has the makings of one. If it can start holding over $2.50 I think we could see a double to $5. Set your alerts.

Stay sharp, 

Jack Kellogg