NVDA is higher this morning, having dealt ample opportunities for scalps and day trades over the past few market sessions. Using the “Trade of the Day” setup (TD), members have keyed into proper buy points, during the LIVE broadcasts. If price action opens at levels suggested earlier, during the pre-market session (103.00 +/-) we could be in for another profitable day on this favorite semiconductor, “internet-of-things” candidate.
NVDA is one of four chip makers, back in growth mode. IBD included these candidates in the “Stock Spotlight” this morning. Here are a few excerpts:
Semiconductor stocks now make up a quarter of Stock Spotlight after Marvell Technology Group (MRVL) joined the list on Friday.
The Bermuda-based maker of storage, networking, and wireless connectivity chip systems recently beat Q4 bottom- and top-line estimates and raised its Q1 sales guidance well above views. Profit growth resumed the past three quarters after year-over-year declines the prior seven periods.
Shares are extended from a 15.09 buy point of a flat base it cleared Jan. 25 in heavy trade. Several analysts hiked their price targets following Marvell’s results.
Let’s take a look at MRVL. Will it continue higher today?
If traders are interested this morning, we will see it first on the 5 minute charts. If the stock immediately flags during the Opening Range, look for a breakout, distinguished by bullish continuation candles.
Bollinger bands are tight. A bullish day would affect MACD, RSI and stochastic. A push above current levels (52 week highs) could send MRVL into an area of “no overhead supply” and little resistance to higher prices. One caveat is the 4th stage base, therefore we would take smaller position sizing as a rule.
Cavium (CAVM) designs system-on-a-chip microprocessors used in the networking, communications and consumer markets. In the fourth quarter of 2016, the San Jose, Calif.-based company posted a triple-digit profit and sales gain for the first time in years. Analysts expect triple-digit growth on both the top and bottom lines to continue this quarter and next.
CAVM is extended from a 66.24 flat-base entry (Jan. 30). Supporting the stock is its 50-day moving average, not shown, which continues to climb higher since December. Cavium holds a 99 Composite Rating in this industry group. An excellent entry would be on a “pullback” to the rising 9ema. In the interim, look for a “Trade of the Day” setup for scalps and day trades on this scalp. If the stock closes near the HOD, you might consider a swing. Stop if it falls and closes below your flag on the 5 minute after entry.
Applied Materials (AMAT) has rallied more than 20% from a 31.17 buy point, having graced our watch list repeatedly over the past couple of months. Consider legging out of your positions, as we will likely see some profit-taking in this range. AMAT has racked up weekly gains for the past nine consecutive weeks. Its relative strength line is in new high ground, a sign of strength.
A bullish day in the SOXX and SMH, would suggest continuation in all of these candidates.
It’s snowing like crazy outside, so keep an eye on your charts should we lose power in the North East this morning. Wind gusts are pretty significant as we go to press.
Happy Tuesday,
Vinny
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