📈 Short Semiconductors?

Let's walk through the recent conflicting news.

Semiconductors at a Key Level

Right now semiconductors are sitting at a pivotal level and it is important to watch what transpires today.

From the chart below you can see that we closed at the low of the day on SOXX and are sitting right on the 55 SMA.

Semiconductor Drivers

There are a few key drivers that we need to be aware of in the semiconductor space.

First, two days ago AMD reported earnings and free cash flows came in significantly below expectations, causing the stock to drop after hours and we sold off all day yesterday as well.

Additionally, SMCI dropped 33% yesterday based on the fact that their accountants resigned just a few days before their earnings (they report Monday).

This series of negative news was enough to bring the SOXX down.

However, the one positive piece of news that we got yesterday is that KLAC earnings were strong. It hasn’t resulted in the stock rising significantly, but it is positive news for semiconductor equipment manufacturers.

Next Steps

With all of this being said, we need to watch the SOXX very closely today to see how we act around the 55 SMA. If we lose the 55, we lose institutional support so this is extremely important.

I walk through the trade opportunities that semiconductors are presenting here: