tech
Chipmakers are overextended. Where Josh Brown is picking his spots in the sector
Josh Brown and Sean Russo look through the chipmakers on their Best Stocks list.
TL;DR
- The semiconductor ETF (SMH) is significantly extended, trading nearly 50% above its 200-day moving average with a high RSI.
- Current gains are driven by momentum and fear of missing out, necessitating disciplined risk management.
- Nvidia (NVDA) shows a strong uptrend with a constructive RSI, making it an actionable setup for traders above its 50-day moving average.
- Broadcom (AVGO) has broken out to new highs, but its elevated RSI suggests patience for a potential retest of former resistance as support.
- Intel (INTC) has seen a dramatic surge driven by a perception change; traders are advised to wait for a pullback to a more reasonable entry zone.
- Microchip Technology (MCHP) is showing strong buying pressure with an elevated RSI, suggesting traders wait for a pullback to the 50-day or 200-day moving average.
- For long-term investors, a rising 200-day moving average is a key indicator for maintaining the trend in these semiconductor stocks.