Stocks Rise On August 28, As The Chip Sector Struggles

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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August 28, 2020

STOCKS – INTC, SWKS, QRVO, AMD

Macro – SPY, SMH, DXY

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S&P 500 (SPY)

Stocks are rising here in the US, despite a mixed overnight trading session. Currently, the S&P 500 minis is trading up 27 basis points to 3495. The RSI is now at 79, and the upper Bollinger band has been breached. The last time the RSI was higher was in January 2018. At least, based on the chart, it could continue to rise to around 3,600. 

The index is extremely overbought, and this puts it in hazardous territory. When the market gets this overbought, it doesn’t take much for momentum to shift in quickly, and unexpectedly.  

Dollar 

The dollar is sinking today after Shinzo Abe said he’d resign from his post as PM of Japan. This is causing a big risk-off move in Japanese equities, and a big push into Yen. As a result, the dollar is weakening, and we see yields in the 10-year lower.  This is an essential level for the dollar, and not what I had been thinking would happen. But then again, I didn’t know Abe would be resigning. 

Semis (SMH)

We should probably watch the SMH pretty closely. It looks like it retesting the breaking of its uptrend. It could mean that the ETF is heading lower from here. 

AMD (AMD)

AMD has struggled around resistance at $86.50. It is a significant level as it could market a double topping pattern, a reversal pattern.

Intel (INTC)

Intel is the only stock that doesn’t seem to go up these days. It probably means it goes lower to $47.60. 

Skyworks (SWKS)

Skyworks broke that significant uptrend, and if it suggests a reversal of trend, then $128 would be the next level to look for. 

Qorvo (QRVO)

We can see that Qrovo has started to roll over as well, with the potential to fall back to around $115 and fill the gap. 

Ok, see you later. 

mike

Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results. 

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