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Semiconductor Stocks

Trump Gives Tech Stocks a BIG Boost

Things haven’t panned out as expected for many of the high-growth stocks we covered this year.

Despite a strong economy, low unemployment and new record high recorded for the Dow back in July, markets today continue to remain choppy.

And some of the worst of this turbulence is happening in tech, most specifically in the semiconductor sector.

But looking at the charts today, along with some breaking tariff news, we may be in the first stages of a fall breakout.

Let me show you why.

Giving Back Almost All The Gains

We can’t know where we are heading without first knowing where we came from…

Through Q1, semi stocks were humming along and putting tons of cash in people’s pockets. But as the trade war continued to drag on and intensify, semis fell under heavy selling pressure.

The volatility has battered the sector left and right through summer. Many of the major semi ETFs were down significantly through May all the way through to yesterday’s close.

Here’s a quick casualty report:

  • Direxion Daily Semiconductor Bull 3X ETF (SOXL) was down over 22%
  • IShares PHLX Semiconductor ETF (SOXX) was down over 6%
  • ProShares Ultra Semiconductors ETF (USD) was down over 25%.

That was then, however… This is now. And by all indications we may be looking a snapback rally square in the face.

Allow to me to explain…

Trump Gives Tech Stocks a Boost

We all know the power Trump has when it comes to impacting stock prices.

Today stocks are on the upswing after news broke that Trump plans to suspend certain tariffs on China.

Yahoo Finance reports:

The Office of the U.S. Trade Representative announced Tuesday that products including “cellphones, laptop computers, video game consoles, certain toys, computer monitors and certain items of footwear and clothing” would not be hit with a 10% tariff until Dec. 15.

The news sent tech stocks flying. On the day so far, the same ETFs that were mired in red are now surging today:

  • Direxion Daily Semiconductor Bull 3X ETF (SOXL) is up over 8%
  • IShares PHLX Semiconductor ETF (SOXX) is up 3%
  • ProShares Ultra Semiconductors ETF (USD) is up almost 6%.

Great news today. But what about moving forward?

For that answer we’re turning to our in-house technical experts and breaking down the charts. Here’s what we know.

Using trendlines on the iShares PHLX Semiconductor ETF (SOXX), we can see that the semis downtrend may have finally ended. In June SOXX had established an upward trendline, netting higher highs and higher lows through July.

Then more tariff drama hit the market and you can see the breakdown (red arrow) as we moved into August. But then just as SOXX looked like it may be in for even more pain, we started to see a new uptrend establishing.

Over the past week, we’re starting to see SOXX establish a string of higher highs and higher lows again like we did in June:

SOXX

We’re short on data points, meaning it’s too early to confirm this uptrend. But if SOXX can close above its most recently established low (black line), we’ll have one more data point indicating a breakout.

A close above 200 today would further confirm this for us.

Speculative folks may want to want to be first-movers on this potential snapback rally.

But if you’re more risk averse, don’t worry.

With a number of semi companies reporting soon, including Nvidia (NASDAQ: NVDA), we’ll have a lot more data points to work with by the end of the week.

That will give us a lot more solid data to determine which direction the semis really want to take this fall.

Stay tuned.

For Technology Profits Daily,

Ray Blanco
Chief Technology Expert, Technology Profits Daily

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Ray Blanco

Ray Blanco is the editor of Technology Profits Confidential as well as Breakthrough Technology Alert, Ray Blanco’s FDA Trader, Penny Pot Profits,
Ray Blanco's Pot Stock Mastermind, and Technology Profits Daily. Ray has been with Seven Figure Publishing since 2010. In 2018, his closed positions in Technology...

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