On Semiconductor Fab Equipment

The Semiconductor Equipment sector is part of the solution to the Semiconductor supply shortage problem

Per NFTRH 656 and several editions previous to it, we have been viewing the Semi Equipment stocks in a fundamentally positive light, regardless of the technicals. Today, the technicals are starting to prove out as well. From #656, including the ‘leadership’ chart below.

“Staying with a weekly market view let’s check in on internal leadership using a weekly chart instead of the usual daily.

In the context of this chart Semiconductor sector leadership to big Tech is completely intact to trend and has been making a healthy looking pullback, while Semi’s own internals continue to back up the point I’ve been making about Semi Equipment vs. broad Semi. That is that to help the supply bottlenecks you need more equipment. I continue to hold Equipment makers LRCX, AMAT, BRKS and ASML due to that view.”

Today AMAT gives a view of what I mean when I say the technicals are starting to prove out. It’s taking back the SMA 50 after not making a key lower low (below which I’d have had to admit I was wrong). So are the others along with the broader SOX index.

As an aside, I know NFTRH is thought of in many corners as a gold/silver/miners rag. But it’s way more than that. I don’t see why people would willfully squat exclusively in an under-performing segment while other areas offer rewards in line with the current macro.

Don’t get me wrong, I am watching signs in the gold sector as well because past does not extrapolate well to future in the rotating macro that’s in motion. But there’s a big world out there, folks.

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