Anything But Secure:
As the software arena attempts to navigate its way to a potential bottom, some sub sectors in the space are not cooperating. Below is the chart of the HACK ETF, which represents the security names. Against the IGV its performance has been forgettable. On a one year look back period the HACK is actually DOWN 2%, while the IGV has risen a tepid 9%. Over a much shorter time frame, the IGV sits 6% off its most recent 52 week highs, while HACK is 9% from its most recent yearly peak. Top component SYMC, which has activist involvement, bounced off the very round 20 number on 8/7, and has advanced firmly since. Others in the top ten of the fund like SAIL, a somewhat recent IPO, now trade 40% off most recent 52 week highs. More established names like FEYE, which was rejected at the very round 20 figure last November-December, are trading incompetently. Let the dust settle where it may on the security names, and wait for bottoming candles to surface. It makes the catching knives a bit less messy.
Semi Awakening?
The semiconductor space has been the creme of the crop within technology recently. We believe this nascent trend will continue. Focusing inside the group some names have responded much better than others and they deserve the bulk of any capital you are willing to allocate to the space. Below we take a look at a name AMKR, that on first glance would seem strong trading just 5% off most recent 52 week highs. A longer term look, would show it has been meddling in the single digits for a year and a half. I prefer to buy leaders, but some turnaround plays are worthy of speculation. We spoke of the round 10 number thwarting some consumer names in our last 2 daily reports, but this one could see a move above that very round number. It has a beach ball held underwater feeling, but as always demand PRICE confirmation on a CLOSING basis.
Examples:
To be a part of two strong groups is certainly a blessing. The solar space has been with the TAN higher 26 of the last 38 weeks, beginning with a 9 week winning streak beginning with the week ending 12/28/18, and this week has added another 8.4% heading into Friday. Below is the chart of FSLR, which has exposure to the semiconductor space, and how it appeared in our 9/12 Technology Note. For 6 weeks the stock was rejected at its 50 day SMA, but that all changed this week. It now trades just 3% off most recent 52 week highs, and is approaching an add on with a potential break above a cup base pivot of 69.34. On its WEEKLY chart that same trigger can be interpreted as a cup with handle base that began the week ending 4/27/18.