Hey all, if you were to look at my portfolio right now, you'd probably be surprised at how much my allocation is shifted towards semiconductor names like NVDA, SMH, AMD, AMAT; I look at all these charts and see nothing except for upside in the near-term. Names are all overdue a significant bounce and are basing as I write this post. In my eyes, it's a matter of time until these names ramp to the upside. I would not be surprised at all if TSLA's earnings call tonight catalyzes things. Even IF this trade does seem to go awry(Which I sincerely doubt will happen), I expect there to be easy exit opportunities at break-even, but I'll worry about that if we get to that point. Regardless, I think semiconductors long here is the best trade in the stock market over the next week.
I believe AMAT is my biggest position long, SMH second largest, then NVDA/AMD
I see upside too, but be careful. It's still a bear market until the structure changes! But with tight stops, i hope you might be able to grab some nice profits in the coming weeks into year end. I can't rule out one final flush down either in the early part of November. We'll see, can't predict but I'm watching semis closely too :)
MichaelEugen1
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@SquishTrade, One thing I may add- part of the reason that I like this trade so much is that even if I am wrong and we breach the lows before we break out, we are so extended to the downside that a bounce that would provide with a break-even exit is incredibly high; it sounds bad, but I almost feel, with my cost basis, that I can't lose on this trade. The worst case scenario is the lows sweep, we bounce, and I stop out on said bounce- possibly in the green. It'll definitely be very interesting to see how it plays out.
rudcharts
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what do you look for or see that you expect this to bounce? what is helping you time the reversal?
AMD is at a support level so I can see bounce there.
MichaelEugen1
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@rudcharts, Firstly, as I mentioned, lots of these semiconductor names are overdue a bounce. That being said, if you look at how these names are setting up right now, they're going sideways... This can only really mean two things: Redistribution before we go lower or accumulation before a bounce. Differentiating between the two is tricky, and I can't really explain how to tell the difference between them, but to my trained eye, it really looks like short-term accumulation- especially when you look at how names like AMAT are starting to ramp up to the upside, and how AMD has had a false-breakdown and has continued holding support like a champ.
rudcharts
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@MichaelEugen1, I got nothing from this lol. Was expecting some kind of technical analysis. "Semiconductor names are due for a bounce" Whats your technical analysis for this though to come to this conclusion? You also they are moving "sideways". Which one? AMD has been going down and for a while now. Smh is in a downtrend too
MichaelEugen1
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@rudcharts I’ll keep it short I wrote a lot without explaining much, lol. They are “due to bounce” because they are very extended to downside, and are basing.
rudcharts
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@MichaelEugen1, you say you dont use MAs anymore so what are you using to measure "overextension" ? Price action trending is over-extended from what if MAs arent used?
MichaelEugen1
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@rudcharts as I was saying, things don’t go down in straight lines. Semis have been going down in a straight line lately, and that isn’t sustainable. They are due to have a relief rally. Pair that with the fact that they were basing very nicely and not plowing through new lows, a very solid RR trade presents itself for a bear market rally- ppl forget that these bear mkt rallies are some of the best times to go long.
MichaelEugen1
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@rudcharts it’s all eye test & context. Don’t need MA’s or RSI, but if they help you, great! I simply prefer using the eye test and think it is consistently better. Context is very important as well.
rudcharts
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@MichaelEugen1, im trying to see what i can pick up from you. You're very good at something im trying to improve in- short term trades in lower time frame against the trend I dont use much in my charts, mostly price action.