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Thursday, February 02, 2017

Chip Stock Rally Broadens: NVDA, AMD, BRKS, KLIC, SMH Charts

Semiconductor stocks have been one of the strongest groups in the stock market since mid-2016, when the S&P 500 recovered and started its march to new all-time highs. 

You can see this clear uptrend taking shape in the annotated weekly chart (below) of Semiconductor ETF, SMH.

SMH chart chip stocks semiconductors Intel Nvidia AMD


The chip stock rally is now broadening out. While big name stocks like Advanced Micro Devices (AMD) and Nvidia (NVDA) led the charge higher in 2016, lesser-known stocks like Brooks Automation (BRKS) and Kulicke and Soffa (KLIC) are now coming on strong and moving to multi-year highs. Let's view their charts.

NVDA has been a powerful leader to the upside since 2015. After climbing through resistance and making a 5-year high in late 2015, NVDA had a throwback correction down to $25 level. The stock resumed its advance in early 2016, setting a new all-time high above $40 in May of that year. Since then, it has climbed over $100 and become one of the most widely watched and traded tech stocks in the market.

NVDA Nvidia stock chart tech leader price semiconductor

AMD has been on the comeback trail for almost a year now. The stock popped to the $4 level in the spring of 2016, exiting a multi-year downtrend, and has continued higher since. Despite some corrections and shakeouts along the way, AMD is now trading above $12.

AMD stock chart daily 1-year semiconductor uptrend


Although I traded AMD in 2016 and was slightly profitable overall on my shorter-term trades, it was also one of my great trading disappointments of 2016. As an experienced trading buddy reminded me, I might have captured a bigger portion of the trend in this stock and made far more money if I had given the stock more room to breathe (wider stops, and a longer trade timeframe) and just sat on my hands as it slowly worked its way higher. Lessons for future trades.

Now, here are the price charts of some lesser-known lights in the chip industry. We're seeing some strong moves to the upside on above average volume here in stocks like BRKS, KLIC, STM, and UTEK. Some of these chip stocks have run up quite a bit in recent weeks, so be sure to find a good buy point which makes sense for you (don't just blindly chase them up here).

BRKS daily chart. As of today's move higher, the stock is now trading at a 10-year high.

BRKS price chart stock chip semiconductor tech


UTEK advancing on good volume today. The stock is nearing a 2-year high.

UTEK stock chart semiconductor price tech chip


SLAB now over $70 and trading at a 16-year high (monthly chart).


SLAB monthly price chart semi stock tech 16-year high


KLIC moving higher on strong volume, recent breakout to 15-year high (monthly chart). 


KLIC chip tech semiconductor stock price chart


STM has had a strong climb out of a long multi-year downtrend. The stock is up over 100% from its 2016 lows and is trading at an 8-year high.

STM price chart semiconductor tech chip stocks


NVMI climbed past its prior highs in the $12-$13 range and is now at a 16-year high.


NVMI chart chip stock tech semiconductor stocks


So while the uptrend in chip stocks is not entirely new, we do see a recent broadening out of the rally with more stocks participating to the upside. I think there is room for further upside in the coming months in SMH, as well as some of the individual names shared here. Keep this group on your radar and in your watch lists.

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