Chip Stocks The Lepers Of The Street
Even a stronger-than-expected productivity report had trouble lifting sprits here on the trading
floor. Outside the semiconductor sector some tech stocks were recovering, but
institutions were bailing on chip stocks, as the lepers of Wall Street continue to
hammer lower.
Of course, most prudent investors will wait for Cisco
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jumping on any stock, as the trading-range game doesn’t favor entry at these
levels.
As far as our KLA-Tencor
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situation yesterday, we noted the downgrade by Credit
Suisse First Boston
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morning and quickly checked to see whether we might take some quick profits on
our bear put spread. As of this writing, KLAC is down $3.42 to $54.54. That
August 60 — 55 Put Spread has expanded to $3.50, a gain of $1 on that $2.50
investment, or a tidy 40% before commissions.
Likewise, the September 60 — 50 Put Spread has grown from $4 to $5.10. We will
continue to trade around both spreads, but those of you that can’t trade tick
for tick may want to throw some offers for both spreads out there in case this
selloff carries KLAC down to our target of $52.