Chips Setting Up Nicely - Trading ON & MRVL
A strong start to the week could see more upside as these names get moving.
Just when you thought 650 was a big number, NVDA started pushing its way towards 700 and nearly got there.
The sector as a whole has performed well and there are still opportunities for more upside.
Take a look at SMH, targeting 200 after a brief moment of selling and dip below the 9-day simple moving average (SMA).
Since October, every time the candles have recovered back above this moving average they continue to run higher.
We just had a nice move up and over the 9-day SMA to start the month and if the trend holds, we should see more near-term upside.
It might seem like we are a bit extended here, but there continue to be big moves and great trading opportunities.
PLTR is a great example. The last newsletter of 2023 called out the support of $15.80 and a need to get above $17.75 before going long.
We got that in a big way after hours on Monday. What a move!
There are many names like PLTR that are showing relative strength and making big moves higher.
We have FTNT reporting, another name that I think can power higher and one that we have trade ideas out for already.
Not every name will work out though. Which is why every trade I consider has criteria that must be met before entering the trade.
RMBS was set up for a nice move higher but instead it rejected hard after reporting on Monday.
Did I lose money in this trade? Not at all. I never took the trade because it didn’t make the move we needed to see for a continuation higher.
It is as simple as that. Take the trade when the right level has been hit, ignore it otherwise and look to the next opportunities.
And I think we see more semiconductor stocks providing those opportunities.
A couple of additional names in the space that have my attention are ON and MRVL.
ON has made an incredible move back above its 50-day SMA after a nice earnings report and looks like it wants more.
MRVL is seeking support at prior resistance before a potential move back to recent highs.
I’ve got trade ideas for both!
Keep a few things in mind as we trade at extended levels.
First, the trend is your friend. Don’t try to guess when it will break.
Second, because of this mentality of sticking with the trend we will have a losing trade when the trend finally does break and we are long. This is normal and what stop losses are for.
Third, taking profits quickly becomes even more important for long trades when markets have run this far.
I want to see more upside but take some profits off along the way so you can enjoy them. Nobody goes broke taking profits.
I hope that helps!
Let me know if you have any questions and have a great day trading!
Now for today’s trades, ON and MRVL:
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