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Merry Christmas people!

I’m a bit off the script with this one. But I felt like sharing a couple charts and some thoughts on Semiconductors while everyones checked out of the markets for the next couple days.

Semiconductors as group has more or less been consolidating since mid July… Aside from Broadcom Inc (AVGO). This comes after an absolutely massive run the industry had experienced the 12 months prior to this. If we take a look at the SMH - Semiconductor ETF chart below, you can see price peaked in July and begin what has been a 7 month long consolidation. Very necessary consolidation if you ask me, if we want to this space to have further upside. Price is currently trading just over its 50-day and 200-day moving averages as it continues to trade sideways. If the semiconductors can firm up here, this could offer a great risk to reward opportunity in one of the most import industries in the market.

SMH - Semiconductor ETF: Price reclaiming the 50 day moving averaged, while also just above its 200 day. This looks like it could be in the works of building the right side of a big base. If this can resolve to the upside from here, it would also bode well for the market as a whole and likely add some fuel to this bull market.

SOXL - Semiconductor 3X Bull ETF: The 3X bull ETF looks to be building the handle of what is a massive multi-year cup and handle pattern. Will be very interesting to see if this starts to curl up from here.

NVDA - Nvidia: has been developing a relatively bearish head & shoulders pattern on the daily for the past few months. I think just about everyone has seen this chart posted somewhere by now. The one caveat, is this pattern is known to make robust moves in the opposite direction when it fails. As of today Nvidia has reclaimed the 50-day moving average, reversed back upward, and reclaimed the resistance line. As of right now, this head & shoulders breakdown looks to be failing as the stock regains momentum to the upside. This is one of the biggest and most important companies on the planet and if this bull market continues, I would like to think this name would participate.

AMD - Advanced Micro Devices: This has been consolidating for months. After breaking out at the beginning of the year along with the industry as whole, it has more or less traded down for the rest of the year. It’s testing its previous lows and bouncing off this level. This happens to coincide with the 200 week moving average just below. I like this chart against that 200 week moving average as a risk parameter.

All in all, the space has had a healthy consolidation after massive rally, and now there are some signs flashing that things could be beginning to firm up. I’m keeping an open mind, and highly considering positioning myself to benefit from this industry, if the market gives it to us.

I will likely get more in the habit of sharing these shorter form thoughts, on sectors and individual charts throughout the week, as sometimes its hard to cover everything I would like to in one newsletter over the weekend.

Anyway, enjoy time with the family today! Eat drink and carry on.

Merry Christmas!!

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