- Advanced Micro Devices (AMDThe stock needs a bounce and stats.
- Intel Corporation (INTC) is located in a 5-year-old support zone.
- Technology Sector Selection SPDR Fund (XLK) Back to renew the momentum.
Make no mistake about it, stock markets are still close to all-time highs. This means that the chance of a correction from here remains very high. There is plenty of room to fall if the correction has already begun. Meanwhile, there is no evidence of an imminent trigger. But there is no shortage of potential culprits. Hence, there is reason to bet on one of these three tech stocks to buy this week.
The focus this week will likely be on banking stocks. JP Morgan (New York Stock Exchange:JPMEarning season will start in the middle of the week. They don’t have the best records of following the upside after their winning season. He will need the money to go elsewhere, perhaps to technology. However, this does not mitigate the risks. All three tech stocks I bought have similar risks below their current prices. This makes them responsible even for the pain of sympathy from other companies that are reporting. Small hiccups, even if sympathetic to the banks, can turn into a bigger disaster.
Symptoms of this anxiety appear in Nasdaq. If it loses its footing this week, it will likely drop at least 2% to 4% quickly. This might be enough to trigger a more dangerous drop in the three tech stocks I’m suggesting today.
This highlights the importance of treating these stocks as tactical deals rather than investments. The condemnation is mediocre at best for this reason, even if none of it is bad. These are very successful companies and they will succeed in what they do. Today’s discussions revolve around how to take advantage of price action in the near term.
|AMD||Advanced Micro Devices||USD 97.78|
|INTC||Intel Corporation||USD 47.01|
|XLK||Technology Sector Selection SPDR Fund||USD 149.52|
Advanced Micro Devices (AMD)
I’ll start with Advanced Micro Devices (NASDAQ:AMD) because it’s my favourite. You have accomplished a lot under the current leadership. Its financials have improved to a point that one would consider cheap. This is a relative term of course, as it is a high growth company. You can’t achieve what you’ve been doing for years by pinching pennies. But it all ties in with its competitors, and AMD shares are solid on that front.
On the other hand, it technically swung above a sharp support line last week. Losing that day will cause it to drop but what to do is to buy the dip near the support. The potential target could extend below $25, but there are support lines at $95 and $90. The bounce should be enough time for the bulls to regain their balance, at least for the time being.
This might upset fans, but I only intend to point out the potential of this. I don’t guarantee a drop of $25, in fact, I’m betting the opposite will happen. It’s a “too bad it’s good” business case. Once the stock drops into a tight support line like this, I can become optimistic assuming that it can expel weak hands in the short term. But I also have to set strict stopping rules in case I’m wrong. Basically, AMD’s stock is staying put in the long-term. If stock markets go up in the future, I’m sure they will lead as well. This is a tactical trading opportunity that is independent of investment decisions.
the opportunity Intel Corporation (NASDAQ:INTC) Now it is a little different from AMD. INTC stock is also falling, but not in a sharp streak like AMD’s. Intel usually has a bounce from a wide area located directly below the current prices. Therefore, this tactical trade can also work for a long-term investor. However, it only needs to take partial positions to get started.
When we talk about growth, INTC stock doesn’t come to mind. However, it is king of value, especially in the semiconductor sector. Make no mistake about it, Intel is the behemoth here, but it doesn’t get the respect it deserves from traders. It is two times larger than its other major competitors in total.
At some point, that dominant position will come back into play. If so, INTC’s stock will attract more interest in the future. Until then, I prefer using sell options at the support area below. This way I can collect some premiums for being an optimist without the expense (all while leaving room for error). Owning a few stocks over the long term would also make a good starting position for investors.
SPDR Technology Sector Selection Fund (XLK)
opportunity in Technology Sector Selection SPDR Fund (New York:XLK) is not exactly that found in the pure chip stock. The two main components of XLK are apple (NASDAQ:AAPL) And Microsoft (NASDAQ:MSFT). They represent 40% of the XLK Fund. This makes the opportunity in XLK similar to that of technology stocks more broadly.
The difference is clearly shown in the XLK chart vs VanEck Semiconductor ETF (NASDAQ:SMH). Choosing SMH now would be very similar to AMD’s. It also needs an immediate bounce or it will lead to a bearish pattern. On the other hand, XLK is showing a slight bounce after a strong rally. So, there might be a little room to give back without the machines chasing it down.
XLK Ingredient Basics Impeccable. The list includes the world’s best technology companies, including fintech companies such as Master Card Credit Card (New York Stock Exchange:MA). Technically, it failed at $164, as there is now a potential catalyst. It will be resistant until the bulls gather enough steam to penetrate. Conversely, there is not much solid ground for support even closer to $146 per share. There will be willing buyers below these levels, but there is no fine line. However, $146 has played a major pivotal role since the crash on January 24th. I expect it to remain relevant for a little while longer. XLK bulls will do well not to test the theory of what lies below.
Posted by Nicolas Chahine He did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, and are subject to InvestorPlace.com’s posting guidelines.