Semis Ready For Another Thrust?

The semiconductors have a good stickiness feel to them as they attempt to climb above a bull flag pattern on the ratio chart against their software peers. We mentioned recently how bullish the three very taut WEEKLY consecutive closes were between the weeks ending 7/10-24, with each CLOSING within just .75 of each other. AMD has been a standout, at INTC’s expense, NVDA continues continues to lift off the very round 400 number. IPHI did record a bearish reversal today after earnings, but it too has been a leader. ACMR should be on investors radar with a double digit WEEKLY gain already, and this is excellent follow through after the prior week jumped 13%. I still think one should overweight semis compared to software as the ratio chart below suggests. But most likely both will act well going forward, as evidenced by FLSY TDOC DOCU and SHOP. The Nasdaq overall is extended, but it did CLOSE above the 10800 number I was concerned about recently. FANG is not holding up its end of the bargain as AMZN GOOGL and FB are cooling off here. Once they catch their breath, expect a potential surge above the very round 11000 figure.

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