Traders,
I look forward to sharing some of my top ideas with you all for the upcoming week. So, without any delay, let’s get right into it:
Starting with what will likely be my main focus for the upcoming week, the semiconductor sector.
SOXL Short: The semiconductor industry has been on a tear lately, with phenomenal momentum and multiple weeks of follow-through on the upside. Now that the sector is in extreme overbought territory, I’m looking for a reversion trade.
On the higher timeframe, I remain bullish overall, but charts don’t lie. And when a sector extends significantly from its mid-to-high key SMAs, and we get range and volume expansion, along with an RSI approaching 90, it’s definitely not the time to be positioning long. Rather, it’s time to look for profit-taking and a short opportunity. Thereafter, once certain names / the sector pull into their 5-day and maybe even their 10-day and bases, I’d look for longs.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
In an ideal world, we get a gap up in SOXL or a continuation to the upside over the next day or two. If that were to happen and price were to extend for another day from the 5-day, I’d look to open a swing short position. In order to size up the trade, I need to see the sector fail to follow through (lower high / take out prior days’ low or key support / relative weakness to the overall market), or I’d need to see a blow-off move to the upside met with a hard rejection and level to trade against. Also, I’ll be paying close attention to key sector names and their performance relative to the sector and the market, such as NVDA, TSM, ARM, AVGO, INTC, and AMD.
Within the SOXL / Semi Short Idea, here are a couple of individual names that I will have on watch as well:
AMD: Congrats to the AMD bulls, what an incredible run it’s been on. Up multiple consecutive weeks, on a daily basis, …it’s definitely getting close to a pullback and profit taking, in my opinion. If the sector begins to pull in and show some failed follow-through, I’d likely position short against the HOD in AMD.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
ARM: ARM obviously just broke out of a major higher timeframe base. But in the event that this gaps up on Monday / pushes toward 250 – 260+ followed by some sector weakness, this would be a top choice for me to position short against the HOD for a measured pullback. Specifically, I like the extension from the 5-day, the top-heavy volume on Friday, and the RSI approaching close to 90.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
Additional Ideas:
NBIS: A name that I’ve spoken about a lot – and continuing to watch closely. I love that it’s begun to pull back. Ideally, this pulls further toward its rising 20-day SMA and bases, setting up a new long-term swing entry.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.
CAR: If CAR reclaims its 2-day VWAP or flushes sub 200 and reclaims on Monday, I may look to get long intraday against the prior 5-minute higher low for a bounce. This won’t be a leading focus, though.
*Please note that the prices and other statistics on this page are hypothetical, and do not reflect the impact, if any, of certain market factors such as liquidity, slippage and commissions.