Semiconductor Stocks Retrace?

Nearly two years ago, the semiconductor industry received a jolt of newfound interest when the world woke up to the game-changing capabilities of generative AI and the powerful chips that make it possible. While the biggest beneficiary of this interest has been Nvidia, a lot of big giants are catching up closely behind. 

NVIDIA

Nvidia has become the world's most valuable company following a staggering rally in its shares, underlining the outsized role investors expect artificial intelligence to play in the global economy over the coming years. The surge in Nvidia's market value has been driven by demand for its chips, which are the gold standard in the artificial intelligence (AI) space. 

Nvidia daily chart

NVIDIA continued to rally following its strong earnings result and also its stock split stimulus. The momentum remains very strong despite a crazy rally since mid May. Following its 1-10 stock split since 2 weeks, NVIDIA share price has not shown any sign of weakness yet until last Thursday. As shown in the chart above, an bearish engulfing candle appeared together with a significant volume. The gap down last night might be a confirmation signal for short term correction on NVIDIA $NVIDIA Corp(NVDA)$ price. 

AMD

Recently, a hacker by the name IntelBroker posted an ad on the dark web, claiming to have stolen data from AMD. The stolen database allegedly includes details about the company's employees and customers, as well as future AMD projects. AMD confirmed the attack, but also added that only limited information has been accessed, meaning there won't be any significant impact on its business.

AMD daily chart 

For AMD, its share price is much weaker as compared to NVIDIA. The stock consolidated for the past 3 weeks. Aligned with my prediction last week, AMD pullbacked towards EMA 200 trendline support at around 130 USD and began to rebound. The rebound strength was not strong yet, but this might a beginning for $Advanced Micro Devices(AMD)$  uptrend movement. 

Intel 

Intel said that its 3nm-class process technology called Intel 3 has entered high volume production at two sites as well as provided some additional details about the new production node. The new process brings in both higher performance and higher transistor density as well as supports voltages of 1.2V for ultra-high-performance applications. The node is aimed at Intel's own products as well as at foundry customers. It will also evolve over the coming years.

Intel daily chart 

As a dead cross is observed between EMA50 and EMA200, a mid to long term bearish movement for Intel is unavoidable. However, if you look at the short term, there might be some rebound chance for Intel. The share price seems to form a short term bottom at around 30.57 USD and is able to hold well at this position. I believe the worst is over for Intel and at such price, the risk of having long is much lower than shorting the company. For such, even though the technical chart is not favourable for Intel, I vote bullish for I$Intel(INTC)$  in short term, hoping for a powerful rebound.

TSM

Intel will have TSMC manufacture its new line of 3nm chips. TSMC's 3nm production capacity was already close to maxed out before this announcement -- and may now be at full capacity. The company's gross profit margin has already stabilized, and should be ready to move higher now.

TSM daily chart 

Quite a healthy chart for TSM, comparable to the one of Nvidia, nothing much to monitor and comment other than a clear obvious uptrend. What a strong momentum by TSM as it continued to break new high this week. Supported by the strong market demand for its manufacturing capabilities, there's no reason that TSM share price will stop here right? Higher will only go higher, bullish for $Taiwan Semiconductor Manufacturing(TSM)$ ! Correction will just be some short term noise for the share price. 

SOXL

SOXL is an ETF that offers 3x daily long leverage to the PHLX Semiconductor Index, making it a powerful tool for investors with a bullish short-term outlook for semiconductor equities. Investors should note that SOXL's leverage resets on a daily basis, which results in compounding of returns when held for multiple periods. SOXL can be a powerful tool for sophisticated investors, but should be avoided by those with a low risk tolerance or a buy-and-hold strategy.

SOXL daily chart

Following the crazy rally in semiconductor stocks mainly by Apple, NVIDIA, Broadcom for example, SOXL broke new high towards mid of last week. However, it began to retrace on Thursday and Friday. Anyway, I continue to stay bullish for $Semiconductor Bull 3X Shares(SOXL)$  and I believe it might be able to rebound easily at its neckline support (drawn in blue in the chart above), at around 57 USD. 

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