The Hot List: 3 Tech Stocks for Short Term Traders
While much attention is being granted to the energy stocks and the financials, traders and active investors more interested in the stocks that are likely to move tomorrow than the ones that have already made their moves may want to take another look at some of the better quality pullbacks in the technology sector in general, and the semiconductor sector in specific.
Technology as a whole may not be oversold (the Technology Select Sector SPDRS ETF (XLK), for example, is trading in neutral territory ahead of Thursday’s session. But looking specifically at the semiconductors provides a different story. The Semiconductor HOLDRS ETF (SMH), unlike XLK, is significantly oversold – moreso than it has been since the bottom near the beginning of October. Similarly oversold conditions can be found in funds like the ProShares Ultra Semiconductors ETF (USD) compared to the general technology ETF, the ProShares Ultra Technology ETF (ROM), as well.
So which are the semiconductor stocks responsible for this specific weakness in technology – and how can traders and active investors best take advantage of them?
First up, shares of Maxim Integrated Products Inc. (MXIM) bounced by a quarter of a percent on Wednesday after closing lower for three days in a row. Wednesday’s modest move higher pulls the stock out of technically oversold territory. But the stock is still set to open on Thursday near short-term closing lows. Note that the pullback in MXIM comes as the stock retreats from its highest level since late May.
Also pulling back from significant recent highs are shares of fellow semiconductor stock, Sandisk Corporation (SNDK). SNDK has sold off for two out of the past three sessions and could find itself in oversold territory on any renewed weakness over the next few days. The stock is only recently back in bull market territory after climbing above its 200-day moving average in early October.
Saving the best for last? King of the chips, Intel Corporation (INTC) is the most oversold of all the semiconductor stocks in today’s report. Finishing lower for four trading days in a row on Wednesday, INTC has now closed in oversold territory for two days in a row. This marks the first time that INTC has finished oversold since stock closed back in bull market territory in September.
All three stocks in today’s report were available from research and data available through PowerRatings. To learn more, click here.
David Penn is Editor in Chief of TradingMarkets.com