|Day's Range||4.05 - 4.15|
Nvidia (NASDAQ:NVDA) stock was a Wall Street darling not too long ago. But lately it has lost its shine and now cannot hold a rally long enough to flip this massive down slide that started last year. Year-to-date, Nvidia stock still lags the chip champ Advanced Micro Devices (NASDAQ:AMD) by more than half.Source: Shutterstock On its way up to $290 per share, NVDA rode the Bitcoin craze up fast. But as the Bitcoin mining headlines faded, the Nvidia stock price fell off a cliff. Ironically, at the highs of almost $300 per share the consensus among experts was that NVDA was a must-buy. Now that it's a lot cheaper with almost all the same fundamentals that supported the rally, it's hard to find any fans of it on Wall Street.Fundamentally speaking NVDA stock is not cheap at 45 price-to-earnings ratio. But owning it at these levels for the long term is not likely to be a giant debacle. This is especially true for patient investors. The company is well set to capitalize on several segments for the next decade of tech.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 10 Best Marijuana Stocks to Buy Now Shorter-term, it is important to pay attention to what the clues in the Nvidia stock chart suggest. There are definite levels that stand out from the latest price action. What You Should Expect From NVDA NowTraders reacted positively to the earnings report this week. NVDA spiked 15% and is now trying to hold the rally in order to extend it. It is important for it to hold higher-lows and break out from $180 per share. If the bulls are able to do this, Nvidia stock should trigger a bullish cup-and-handle breakout to target $200 per share or higher.This won't be easy and there will be resistance, first at the neckline, then at $194 per share. These two levels have been significant prior failure zones. So the onus is on the NVDA stock bulls to prove that they can hold the trend of higher-lows in order to attack the neckline that has so far proven so elusive.For that to happen, Nvidia will need the help of the general markets. This week is another potentially pivotal week for stocks, as today we get the Federal Reserve minutes from their last meeting. And on Friday we hear from the Chairman himself. Recently Fed head Jerome Powell's effect on the markets has been very violent. So coming into the event on Friday the NVDA trade is somewhat binary. Short term, it has more gambling than investing in it.The fear index -- the CBOE Volatility Index (INDEXCBOE:VIX) -- is still elevated but nowhere near critical levels. Only days ago it was pushing $25 per share and now it's below $20. So there is no obvious ramp up in fear, even as equities hang this close to all-time highs in the S&P 500 for example. * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio In other words, this market is indeed climbing the wall of worry. And with a little bit of luck, the rally continues so that Nvidia stock can actually breakout of this funk and recover some old glory.Depending on the portfolio, it is okay to hold or buy NVDA here in anticipation of the breakout as long as investors place proper stops below.Alternatively, instead of buying upside hope, we can sell downside risk into the Nvidia stock price. For example, you can sell the Dec $130 put and collect $2 per contract to open. This way you don't even need a rally to profit as long as Nvidia stock stays above that level, you are a 100% winner. The breakeven from that trade would be at $128 per share. Below it, you would own the shares and accrue losses.Regardless of what you decide to do, you should do it in tranches. This leaves room for adjusting the risk if and when it's needed.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Nvidia Stock Finally Has What It Takes to Break Out of $200 Again appeared first on InvestorPlace.
On Friday, chipmakers Nvidia and Applied Materials will be in focus following their quarterly results that were released Thursday evening.
A recent Wall Street Journal investigation found that Huawei technicians had helped Uganda and Zambia government members spy on political opponents.
Chinese telecom equipment giant Huawei is at the epicenter of a new wrinkle in the trade war. Let’s look at last week’s developments related to Huawei.
The markets were just grappling with the news of increasing trade tensions between the US and China when Trump stepped in to increase the pressure.
Monster Chipmaker Broadcom officially announced its acquisition of Symantec’s enterprise business after the closing bell on Thursday. Broadcom is paying $10.7 billion in cash, according to a statement. Investors were clearly pleased with the news as Broadcom stock rallied 1% in-after-hours trading instantly following the announcement.
On August 1, President Trump escalated the US-China trade war even further by announcing that the US would impose more tariffs on Chinese goods.
President Trump is back with another threat of tariffs on Chinese imports just a month after the US and China agreed to resume trade talks.
Renewed U.S.-China trade tensions, hawkish rate outlook by the Fed and some downbeat earnings releases may lead semiconductor ETFs to slump in the near term.
The semiconductor industry industry is in play after chipmaker AMD reported its second-quarter earnings results on Thursday. While the company was able to be on par with analyst estimates for earnings per share and beat revenue expectations, revenue was actually down 13 percent compared to the same quarter last year. For the bears, this could put the Direxion Daily Semiconductor Bear 3X ETF (SOXS) in play.
In early June I shared a note about going long Qualcomm (NASDAQ:QCOM) stock. The trade delivered a big win as the stock rallied over 20% in about a month. Usually when I get profits this fast, I book it.However, this time the bulls still have the chance to almost double the win. The bullish QCOM stock trade is still viable today.Those long-term Qualcomm can stay in it since the short-term price gyrations don't matter much over the years. Those who are looking for short-term entries have an opportunity at these levels.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Semiconductor Stocks to Buy for Your Inner Geek Pivotal stock price areas like the one that Qualcomm stock has are sticky. Bulls and bears have fought over them in the past and they will do it again now. Neither side will want to lose the line.If the bulls prevail, meaning they prove that they can hold this level as support, then they can use it to set higher highs. And therein lies the opportunity. QCOM Stock Has a $25 Rally BrewingIn this scenario, the breakout levels are clear. If Qualcomm stock can rise above $81, they will invite momentum buyers to target $100 per share. There will be resistance is around $90.50 as it marked a major failure point back in early May of this year.The fundamentals do matter but the technicals for QCOM are more important. The outcome of this battle is not a gimme, the fans need to take it. Onus is on them to deliver.The buyers will need the help of the general equity market. We are at all-time high and investors are usually nervous at these altitudes. This is especially true when we have so many geopolitical concerns littering the ticker tape.Qualcomm stock also has the added wrinkle of the economic war between the U.S. and China. It is part of the sector that has been a political football as they negotiate a trade deal between the two nations.This is likely to linger for years even though the media would have you believe that a resolution is imminent. It is not but this shouldn't affect the fundamentals of Qualcomm much. Eventually businesses will find a way to work around the politicians.The trend of moving into a completely digital age has accelerated exponentially and we will need the suppliers to deliver all they can, especially when it comes to 5G and communications.Where there is a will there is a way.QCOM stock is not cheap as it sells at a 40 price-to-earnings ratio and four times sales. For perspective, this is more expensive than Intel (NASDAQ:INTC) that has a 12 P/E and sells at three times sales.The battles for 5G dominance is raging, so politicians will have to come to terms sooner rather than later if they want smooth evolution to continue. Communication tech is important to the whole world. Two leaders alone are not going to stop it. There will be enough pressure soon enough from both sides to make a deal happen. QCOM Bottom LineMeanwhile Qualcomm stock will continue its ascent in spite of the headlines. The stock has been setting higher lows and has the opportunity to break out from a neckline. If and when that happens, the bulls will overshoot higher.The wrinkle is that earnings are coming soon. The reaction to those is completely binary and arbitrary. Even if the company gives us the results ahead of time we cannot guess how traders will react to it.But as long as management continues to execute well on its plans, eventually the short term knee jerk effect fades and yields to the ongoing trend.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Semiconductor Stocks to Buy for Your Inner Geek * 7 Stocks to Buy That Save You Money * 4 Stocks to Sell Now The post Qualcomm Stock Delivered, Has Another Rally Brewing appeared first on InvestorPlace.
Intel (INTC) stock rose as much as 6.7% after hours on July 25 on its earnings beat and the sale of its smartphone modem business to Apple (AAPL).
I recently wrote about going long Micron (NASDAQ:MU) stock, and it has since rallied more than 45%, so it paid very well. When I get this much profits this fast, I usually book most if not all of them.Source: Shutterstock This is not the same as saying to short the stock -- it's just the right thing to do while managing a successful active trading portfolio.MU stock has been in a whirlwind, but that's mostly due to outside factors more than any problems of its own. It and the rest of the chip sector are stuck in the line of fire during the U.S. and China's economic war. The two nations are negotiating in the headlines, and stocks like Micron suffer the consequences.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn spite of this, most recently MU rallied $15 after the April correction. And it looks like it's headed much higher. MU Stock Could Reach $56 Per Share SoonEven though the chart show another $9 in upside potential, it could first suffer a small dip along the way. So if I am fundamentally long Micron stock, I stay with it. But for the cautious shorter-term traders who prefer to be active, they better wait out the next dollar move before initiating a new position. * 7 Oversold Stocks To Buy Right Now This recent rally brings it back to about the halfway point from the correction that started in May of 2018. This is often a natural resistance level. It also matches Fibonacci logic and the machines usually act on them. So MU stock on its way higher may still stumble here, but it should find support around $40 per share. I would chase it up once it clears the next $2.Fundamentally, Micron stock is cheap but could get much cheaper. Just recently, it fell to under 3 price-to-earnings ratio. However Wall Street is convinced that this MU is a value trap and it has the tendency to lock people into it on the premise of it being cheap. So that alone is not a reason to own it.The semiconductor industry as a whole has a bright future ahead. The world now demands more technology than ever, and this is a trend that will exponentially build from here. There are only a few suppliers for this technology and Micron is one of them.Last night Intel (NASDAQ:INTC) reported a strong report so it's more proof that these companies are thriving in spite of the headwinds. They are doing all they can in order to offset the effects of the political headlines that are wreaking havoc with the natural order of business.The demand for Micron products and services can only increase, and since management is a proven winner, the stock will be higher in the future. Of course it will need the help of the overall stock market. MU won't fall on its own, so if the market is higher in the future then so it is MU stock.Since MU has a ton of value, it makes it a good candidate for selling options. This way traders can use the value to generate income without any out-of-pocket expenses.For example I can sell the January $35 put and collect $1.20 per contract. This way I don't even need a rally to profit. If Micron stock stays above my level, then I win 100%. The worst-case scenario is that I own the shares and break even at $33.80 per share.Since the S&P 500 is near all-time highs, taking any bullish position is risky enough from that perspective. So I make sure that I don't take full positions at these levels. This way I leave room to add in case markets correct. And I never risk more than I can afford to lose.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Oversold Stocks To Buy Right Now * 7 Stocks to Buy Upgraded by Wall Street * 7 Marijuana Stocks With Critical Levels to Watch The post Micron Stock Is Headed to $56 appeared first on InvestorPlace.
On CNBC's "Trading Nation," Matt Maley of Miller Tabak said he's quite conflicted on VanEck Vectors Semiconductor ETF (NYSE: SMH) because the fundamental backdrop isn't very good and the stock is making new highs. Gina Sanchez of Chantico Global said that the ETF moved higher because the valuation of the semiconductor stocks has been very depressed since the China-U.S. clash.
With semiconductor stocks reaching record highs despite trade war jitters, and smashing earnings estimates, it will be judicious to invest in some winning players.
I recently wrote about Advanced Micro Devices (NASDAQ:AMD) and suggested a bullish position. It paid over 20% in about two weeks. This was the case last time so clearly this one moves fast and in the right direction. Although my intent is slightly more long term, the short-term wins that AMD stock delivered are fantastic.Source: Shutterstock In mid-June, sellers had their way with the stock, but only to retest the neckline from which the bulls had recently broken out. This was all part of normal price action. Today, hold Advanced Micro Devices stock for the long term. * 10 Stocks to Buy From This Superstar Fund Often when I get a profit that materializes too fast like this one I trim some if not all of it. But that is only because I am an active trader when dealing with momentum stocks like AMD. Those who prefer a hands-off approach need not worry about the short-term gyrations. The bet on this stock is up.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Hold AMD Stock Through $50 or HigherWe now rely on technology more than ever. It touches almost every aspect of our lives. Everything has tech in it, if not at the user interface then definitely behind the scenes. It takes judicious conscious effort to be truly unplugged.The demand on the products and services from companies like AMD is only going to increase. The barrier to entry is very high. It takes new technological breakthroughs to join the major tech companies in supplying this tech. So AMD will continue to thrive along with its competitors.The particular fundamentals vary largely among them. AMD stock price is not the cheapest. It sells at a three digit price-to-earnings ratio and 6 times sales. This is a P/E 10 times bigger than Intel (NASDAQ:INTC) and four times bigger than Nvidia (NASDAQ:NVDA).From an investment perspective, you get what you pay for. AMD stock has out-performed all its competitors by a long shot. Last year, when the whole stock market was falling off a cliff, AMD was up 50%. This year AMD is up 91% and 146% in two years. This stock continues to lead and investors should stick with it.Recently the technology sector stocks, especially chip suppliers, were hit hard as the headlines surrounding Huawei flew. They are directly impacted by what happens there. But these are temporary because politicians are using businesses as leverage in their negotiations.The U.S. and China are still in an economic head-butting war that has dragged on long enough that it will eventually lose its headline effect. Eventually AMD stock price will stop being a political football and will continue to trade on its own merit. Trading Advanced Micro DevicesIn June the short-term support levels held. This is a cluster around $29 per share and I expect that to continue unless the markets in general correct sharply this year. Conversely, the upside trigger still looms above near $34.40 per share.For the long term investors, there is no need for action. For the shorter-term momentum traders, it is best to chase a breach of either side of the trigger zones noted. A good way to trade AMD stock for the past two years has been to simply buy the dips. So far the stock has not disappointed.The odds stack up against the AMD bears. In June they had a lot going for them and they failed to keep the stock down. Headlines and seasonality gave the edge to the sellers and they ran out of steam. Credit goes to the AMD management team under the leadership of Lisa Su that has gained the respect of Wall Street investors.In my last write-up I also noted the opportunity to create income out of thin air by selling the AMD October $26 put. That trade has yielded $1.50 with nothing out of pocket. I can repeat the process now by selling the January $27 per share and collect $1.80 per share. If AMD stock price stays above my strike I win completely. Else I would own the shares at $27 per share and break even at $25.20.The S&P 500 is still at all time highs so the odds of a dip increase at these altitudes. This makes all bullish entries into stocks, even good ones like AMD, carry a little more risk than normal. So I keep my sizing to half size so I leave room for risk management.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 5G Stocks to Connect Your Portfolio To * 7 Stocks to Sell This Summer Earnings Season * 6 Upcoming IPOs for July The post AMD Is a Stock to Hold Through $50+ appeared first on InvestorPlace.