The Semis are where you want to be. $SMH $ASML $NVDA – May 18, 2023


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This is Scott with your Chart of the Day. I want to take a look at the Semiconductor ETF ( NASDAQ: SMH ) and show you a semi that is on the brink of a breakout. While the group of semiconductors is looking really good, a lot of them are getting a bit extended.

If you look at NVIDIA ( NASDAQ: NVDA ) and you think, Wow, this stock is up 100 percent since January, good for anyone who bought in January. But in terms of new entries right now, in my opinion, a lot of these semiconductors are extended. So you have got to look for clear buy points on the chart so at least you can define your risk in some manner.

With that, I want to show you ASML ( NASDAQ: ASML ). Now, anyone who knows anything about semiconductors knows, semiconductors don’t get made without the company ASML ( NASDAQ: ASML ). They have some of the most advanced machinery, for creating and making semiconductors, in the world. This chart, while it is a bit extended from the 8-day and the 21-day EMA.

It is coming up to a clear breakout point over here from the high in February. You can see how we, kind of, bumped up against, let’s round up a few dollars, the $700.00 level in February. It pulled back to the 100 EMA. It tried it again, couldn’t do it, and now we are right there again. So I want to see if ASML ( NASDAQ: ASML ) can get above that $700.00 level, hold above that level, and do it on volume.

Now if it does, it is probably going to bounce up and down around that area. And so, I do think, it is a pretty key level to watch just because it was a previous resistance zone. And so if it does break above I expect it to, at least, retest that area a few times just to make sure that the breakout is valid.

So keep an eye on ASML ( NASDAQ: ASML ). Watch that key $700.00 level and definitely keep your eyes on the semiconductors. A lot of these stocks are working great in this market.

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