Follow The Leader?
The semi equipment group is led by 3 of the generals in the space with KLAC AMAT ASML TER and LRCX. It is often spoken of how former leaders do not reemerge so when the new bull arrives but to me, it is hard to see fallen angels like AEHR showing initiative, after a decline of more than 70% from its peak last November. Another former small-cap leader that previously showed strength in ENTG could be played on the long side against the very round par number. But within the “veterans” in the space one is starting to potentially show the way in KLAC. It is currently trading ‘just” 20% off most recent 52-week highs. Compare that with LRCX 29, AMAT 29, ASML 35, and TER 35% off their annual peaks and it may set the stage for an awakening of this niche space within semiconductors. KLAC is the only one of the aforementioned five large caps that is above both its 50 and 200-day SMAs, and the only one that did not make a recent lower low, which could be a tell for its possible impending strength. On its WEEKLY chart, it has the look of breaking ABOVE a bearish head and shoulders pattern and we know from FALSE moves come fast moves in the opposite direction