• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock NVDA Is Not The Only Semiconductor Stock Out There.
Stock

NVDA Is Not The Only Semiconductor Stock Out There.

by August 30, 2024
by August 30, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

It’s All Still Relative

The weekly Relative Rotation Graph, as it looks toward the close of this Friday (8/30) shows a clear picture:

Out of Technology, into everything else

Simple enough, right? But, this is a relative comparison, so it only tells us whether a sector is in a relative up- or downtrend or whether its relative trend is improving or weakening.

This means that when SPY starts to move lower, these sectors will likely outperform SPY, but their prices will still go down.

When just looking at the JdK RS-Ratio value as a gauge, there are only two sectors on the right-hand side of the graph with a reading above 100. These are Real Estate and Utilities. All other sectors are below 100 on the RS-Ratio scale and, therefore, technically still in a relative downtrend vs. SPY.

However, except for XLK, all these other sectors are on a positive RRG-Heading, between 0 and 90 degrees, which is a positive takeaway. There is still a risk that these tails may roll over while still inside the improving quadrant and continue their relative downtrend, but especially XLV, XLF, and XLP are looking strong as they are getting close to crossing over into the leading quadrant.

XLY, XLI, XLB, and XLE are still too low on the RS-Ratio scale for consideration, IMHO.

SPY Is Hitting Resistance

With SPY pushing against resistance, this creates an interesting situation.

565 is clearly a very important overhead resistance level for SPY. Only when this barrier can be convincingly broken will there be new upside potential for SPY to continue the longer-term uptrend.

However, it is questionable whether SPY can break that barrier without the help of the technology sector. At the end of the day, that is now more than 30% of the total market capitalization of the S&P 500.

Over the last few weeks, SPY started to trade in a range between 555 and 565. When 555 gives way to the downside, significant downside risk will be unlocked, targeting the recent gap area between 545-548, followed by intermediate support around 537.5-540 and then 510, which is the level of the last major low.

Given the importance of the tech sectors in the current environment, I see the risk of a break below 555 as greater than the potential of a break above 565.

Semis / Tech Are Key

So, the tech sector, and especially the group semiconductors, will play an important role in the coming weeks to determine the faith direction of the general market.

This RRG shows the members of the Technology sector. The big elephant NVDA is clearly visible inside the weakening quadrant and rotating toward the lagging quadrant at a negative RRG-Heading.

The semiconductors and semiconductor equipment group is now the largest industry inside the technology sector, weighing more than 40%. NVDA itself is now the second-largest stock in the technology sector, with a weight of 20%. So when it moves, it moves, making the industry and the sector move.

NVDA is BIG But Not The Only Semiconductor Stock

When I isolate the semiconductor stocks on the RRG, we see this image

Most of these stocks are moving in the same direction as NVDA, on a negative RRG-Heading, weighing in on the industry and then on the sector. However, this is an extremely important group of stocks that deserves at least a minimal allocation in each portfolio “just in case it all turns around and starts to go up again.”

From that perspective, it makes sense to look for alternatives as long as NVDA is rotating on a negative heading, digesting its recent gains and relative outperformance.

Searching for stocks on a positive RRG-Heading provides a few potentials.

Combining the positions on the RRG and looking at the individual charts. MPWR and TXN could be interesting alternatives if NVDA maintains its negative RRG-Heading.

#StayAlert and have a great weekend. –Julius

You Might Also Like
  • Utilities’ Unique Seasonal Powers: The Best Months to Invest
  • Is a New Market Uptrend Starting? Key Signals & Trading Strategies
  • Be ALERT for Warning Signs – S&P 500 Downturn
  • Disney Bust or Bargain? Here are the Levels to Watch!
Share
0
FacebookTwitterPinterestWhatsapp

previous post
New Highs, But Danger Looms—Is XLF Heading for a Big Fall?
next post
Charting Forward: Opportunities You Can Seize in September

You may also like

The Halftime Show: 6 ETFs That Are on My Radar

September 14, 2023

SOTU’s Not-so-Subtle Implications for the Market

February 10, 2023

Is it Possible for the S&P 500 to Hold the...

September 28, 2023

10% Downside Risk For Stocks as Value Takes The Lead

April 24, 2024

DP Trading Room: Intermediate-Term View of the Magnificent 7

April 29, 2024

The Second Half Equities Super Bowl

July 1, 2023

Discover the Hottest Sectors of 2024!

January 4, 2024

Three ROCs can be Better than One

May 12, 2023

Sector Rotation Makes Technology Line Up With Strong Seasonality Pattern

October 3, 2023

This Is How I Crush The Benchmark S&P 500 In...

February 15, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past This Level Crucial For Resumption Of Upmove

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Week Ahead: NIFTY Stays In A Defined Range; Moving Past...

      May 31, 2025
    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,582)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    A NEW ERA of Growth Leadership?

    November 22, 2023

    MEM TV: Risk-Off Signals Possible Downside...

    March 16, 2024

    Equities Remain in Strong “Go” Trend...

    December 9, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here