The semiconductor space continues to be a group I am watching closely as we turn the calendar to 2022. Nvidia was a big winner in 2021. I owned it for many months, but sold it as it went vertical in November. I still believe Nvidia and others in the semiconductor group have room to go as the demand for chips and graphic processing units (GPUs) is not likely to cease in the coming months. Just as those who sold shovels to miners during the gold rush made a fortune, those who can supply the hardware for our modern technology possess an equally strong demand. Nvidia is estimated to have a very strong 2022 which is another bullish sign.
Since topping in November, NVDA has been basing in a constructive manner. This is a stock that is very high on my watchlist for a potential buy.
AMD is also setting up well. I opened a partial position this week as it cleared recent resistance.
Qualcomm has also been shaping up really well. The massive accumulation bars on the weekly chart blatantly stand out to even the casual chartist. As William O'Neil would say, "That's not Aunt Suzy buying." Clearly, funds and institutions are bullish on QCOM's future.
Finally, LSCC is also forming a nice base.
There are a few potential ways to play these. While it would be unwise to have too much exposure in one sector, I believe with proper risk management and stop losses in place, a case can be made to open positions in one or two of these stocks should buys present themselves. I see NVDA as the true leader with AMD and QCOM slightly behind. It is also interesting to note that the semiconductor ETF also appears to be forming a Darvas style box.
While no one can be certain which way the market will go, one thing is for sure: you can never tune out the market. If these or other stocks in a different industry start to break out, you need to be prepared to capture their trends.
Risk right. Sit tight.
Full disclosure: I currently own AMD.
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