tech
Semiconductor stocks did something not seen since the dot-com bubble burst. What the charts show
Todd Gordon takes a look at the charts in the semiconductor space and Nvidia.
TL;DR
- The SMH/QQQ ratio has hit a 26-year high, surpassing levels seen before the dot-com bubble burst.
- Despite the historical parallel, the current trend is interpreted as a secular bull trend, not a bubble, due to accelerating technical angles and sustained upward momentum.
- Nvidia's fundamental valuations are described as 'cheap,' with a forward P/E ratio of 23.7 times earnings, supported by projected significant revenue growth.
- Technical analysis, combining price action and fundamental data, suggests a favorable time to increase semiconductor allocation.
- The author emphasizes the importance of technicals for timing investments, complementing fundamentals for security selection.