Keysight Technologies reported results that beat expectations, with EPS 8.75% above forecasts and revenue 3.89% above estimates. The share price rose about 20% in one day after the update.<\/p>\n
The company also issued strong forward guidance and pointed to rising demand linked to AI data centres. It said its test systems are used to validate high-performance chips, high-speed networking and optical interconnects in AI clusters.<\/p>\n
Since 2016, the share price had traded within a parallel channel and has now broken above the upper boundary at $257.34. The move marked a break from a structural range that has lasted for almost 10 years.<\/p>\n
Technical indicators show the stock is stretched in the short term, with a Weekly RSI of 87.33. The report also flagged the risk of a pullback after a rapid rise.<\/p>\n
A resistance level was noted near $313.09 on an upward trendline. A potential support retest level was identified at $257.34, which was previously the long-term ceiling.<\/p>\n
This massive 20% surge in Keysight creates a complex scenario for us. The powerful AI narrative suggests a long-term uptrend, but the stock is now technically stretched thin. This sharp move requires a more strategic approach than simply buying the stock.<\/p>\n
With a weekly RSI now at a staggering 87.33, history shows that pullbacks are highly probable in the coming weeks. We saw a similar pattern in NVIDIA during its 2023 ascent, where RSI readings above 85 consistently preceded brief 10-15% corrections before the next major rally. This makes buying short-term puts, perhaps with an April expiration, a tactical play against this over-enthusiasm.<\/p>\n
For those of us who believe in the long-term AI story, the $257.34 breakout level is the key. Selling cash-secured puts with a strike price near this level could be an effective strategy. This allows us to either collect income while we wait or to acquire the stock at a much better price if a healthy correction occurs.<\/p>\n
We must acknowledge that implied volatility has spiked after yesterday’s move, making new long options unusually expensive. Data from Cboe has shown that post-earnings IV crush can be as high as 50-70% in the days following a major announcement. Therefore, strategies that involve selling premium, such as covered calls against existing shares, are more attractive right now.<\/p>\n
A more controlled way to stay bullish is through a debit spread, which limits both cost and risk. For instance, buying a May $290\/$310 call spread targets the move toward the $313 resistance zone. This strategy allows for participation in further upside while protecting capital from the potential sharp drop we are expecting.<\/p>\n","protected":false},"excerpt":{"rendered":"
Keysight beats estimates, surges 20% on AI demand; breaks decade-long channel, stretched RSI warns pullback risk.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42726","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=42726"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/42726\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=42726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=42726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=42726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}