If there’s one sector that’s been consistently generous to investors over the past eight years, it’s semiconductors. One glance at the ETF for this sector is all it takes (and, appropriately enough, the ticker is the same as the Internet term for Shaking My Head……….as in astonishment):
A big element behind this, particularly recently, has been the unstoppable NVidia. This graphics card maker has morphed itself into the kind of artificial intelligence/deep learning, and since the intelligentsia are convinced that thinking machines are going to be doing all the work for everyone in a few decades, pushing the unemployment rate to 100% seems to be the flavor of the day. I’ve put this stock in arithmetic scale for dramatic effect:
Stocks in this sector vary in terms of their break-out-ed-ness. Advanced Micro Devices (AMD) used to have NVDA’s crazy trajectory, but it has stumbled for the moment. Applied Materials has enjoyed an incredibly steady run lately, and if things keep going higher with semiconductors, we can expect a breakout to lifetime highs here:
The big daddy of them all, of course, is Intel, and while it is shaping up to a breakout similar to AMAT’s, it has a longer way to go. Indeed, it’s looking the most tired among the semis, and in the weeks ahead, it’s going to face a make (green tint) or break (magenta) decision. If the semiconductor group actually has a downturn (if you can imagine such a thing), a break of this lower trendline would be a strong signal as to that event.