Time To Start Deploying Cash In The AI Trade?
Key takeaways
- Deploy cash slowly into AI stocks now, watching for short‑squeeze signals and geopolitical risks that could reverse the trend.
- SOXL fell below the low band of zone 3
- RSI hit an absolute low of 0.0
- SOXL volume was heavy on Friday
What happened
The article explains that high‑momentum AI stocks, especially semiconductor‑focused ETFs like SOXL, have met about 60% of the criteria for capitulation, yet the author argues that this does not signal a full sell‑off. Heavy volume and short selling on Friday suggest a potential short squeeze that could lift the market. The piece urges investors to slowly deploy cash into AI names while monitoring risks such as geopolitical tensions with Iran, U.S. midterm elections, and President Putin’s…
Why it matters
A 60% capitulation score indicates that many warning signs are present, but not all are triggered, meaning the market could still rally. Short sellers pushing prices lower on Friday could trigger a cover‑buying wave, creating a short squeeze that lifts AI stocks and the broader market. The geopolitical risks add…
Short-term and longer-term
Short-term. In the next few days, watch SOXL and other AI‑heavy ETFs for a possible short squeeze.
Longer-term. Over the coming months, slowly adding positions in AI names could capture upside as these stocks have dipped 30%–60%.