Home | Stocks | Commentary | Here, Semi Semi

Here, Semi Semi

  • June 7, 2001
  • Loren Fleckenstein

For those of you itching to play the
semis for the medium term, a few are starting to form above their 200-day moving
averages. I’m wary of this area because so many components are under tons of
overhead resistance. One possibility, if it can work a bit more on completing a
base, is Axcelis Technologies.

Axcelis
(
ACLS |
Quote |
Chart |
News |
PowerRating) is a producer of
ion implantation, dry strip and photostabilization equipment used in the
fabrication of semiconductors. The chip equipment maker came public on July 11,
2000 in an initial public offering of 15.5 million shares of
common stock priced at $22 per share. 

For my approach to playing
semiconductor recoveries, see my lesson, Selecting
And Trading Turnaround Stocks. 

Allied Waste Industries
(
AW |
Quote |
Chart |
News |
PowerRating) is
emerging from a long base. Midway Games
(
MWY |
Quote |
Chart |
News |
PowerRating) is testifying to the strength
in entertainment stocks.

Among the exchange-traded funds, the
techs led. The Semiconductor HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) jumped 7.6%, the day’s biggest gain
among the ETFs. The Nasdaq 100 Tracking Stock
(
QQQ |
Quote |
Chart |
News |
PowerRating) rose 4.5%, the Dow Jones
Technology iShares
(
IYW |
Quote |
Chart |
News |
PowerRating) 3.7%, the Broadband HOLDR
(
BDH |
Quote |
Chart |
News |
PowerRating) 3.5%, the
Software HOLDR
(
SWH |
Quote |
Chart |
News |
PowerRating) 3.2%, the Technology SPDR
(
XLK |
Quote |
Chart |
News |
PowerRating) 2.9%, the Internet
Infrastructure HOLDR
(
IIH |
Quote |
Chart |
News |
PowerRating) 2.1%.

The Oil Services HOLDR
(
OIH |
Quote |
Chart |
News |
PowerRating) lost
2.4%, the Dow Jones Utilities iShares
(
IDU |
Quote |
Chart |
News |
PowerRating) 1.4%, the Energy SPDR
(
XLE |
Quote |
Chart |
News |
PowerRating)
1.1%, the Dow Jones Energy iShares
(
IYE |
Quote |
Chart |
News |
PowerRating) 1.1%.

All stocks, of course, are risky. In
any new trade, reduce your risk by limiting your position size and setting a
protective price stop where you will sell your new buy or cover your short in
case the market turns against you. For an introduction to combining price stops
with position sizing, see my lesson,
Risky Business.