Semi Sizzler:
This week is the heart of the earnings season and we will hear from some of the more well-known semiconductor companies. Of course, the SOXX has registered a powerful run (NVDA does not REPORT until 2/21) and it certainly feels extended. On 1/24 it recorded a spinning top candle which often indicates tiring from the prevailing direction and the very next session was an engulfing candle so market participants are likely best to wait for a better entry point (notice the bearish RSI divergence too with a lower high in December and January). AMD REPORTS Tuesday after the CLOSE and it has soared following a big break above the very round par number and the 50 and 200-day SMAs all on 11/1 (notice the doji on 10/30 right at near-term lows offering good risk/reward that lows were in). Below is the chart of SMCI that REPORTS Monday night, and it rocketed 36% on 1/19 after preliminary results were better than expected. Round number theory has come into play as the bull flag formed just above the 300 figure and 500 has been a recent impediment with a doji candle last Thursday. Tuesday should be an explosive session one way or the other for the stock and let us use it to see how tech earnings season may play out.