The semiconductor industry is one of our top ranked focus groups currently and could be setting up for a test higher this week.
Semiconductor ETF (SMH) reclaimed both the 50 & 200-day moving averages last week and reclaimed the rising 40-week MA on a closing basis for the first time since January. Weekly trend momentum (MACD) is also improving, and after waning for 16 weeks has been improving over the last two weeks. For SMH, a close over 290 could open up the chart for higher prices and 255-260 is key on any pullbacks.
Our top 3 large caps in the industry are market cap leader Nvidia (NVDA), which made it’s highest weekly close for 2022 on Friday, on above average volume. Advanced Micro Devices (AMD), which reclaimed the 40-week MA and had the first weekly close over the 10-week MA since late December. Broadcom (AVGO) just broke out of an 11-week base and made the highest weekly close for 2022 as well. On any upside market follow through, we believe the semiconductor industry could outperform.
Disclosure: At the time of this post, the Author is currently long Nvidia (NVDA) and Advanced Micro Devices (AMD) stock.