Semi Surge:

We have heard ad nauseam about the semiconductor shortage in recent months. But keep in mind it is not the news that matters, but the reaction that the stocks have that are affected by it. One can see below how the SMH is now just above a cup-base buy pivot, and we want to see at the very least some digestion here, or better yet some further upside as we know the best breakouts tend to work right away. With the exception of INTC, the reaction to earnings has been pretty solid with AMD MXL ON RMBS and SGH to name a few. We will hear from a couple of the laggard plays with QCOM after the CLOSE on Wednesday and SWKS after the bell Thursday. Both are right near bear market mode off about 20% from highs, as are some of the equipment names like KLIC, which recently recorded a 6-week losing streak and is now looking like it wants to resume its downtrend off more than 5% this week already. Stick with what is working and place your capital where it is treated best in names that are in uptrends.

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