How to Trade Broadcom, Intel, 3 Other Chip Stocks Right Now

The U.S. semiconductor industry has been one of the stronger sectors, as measured by the PHLX Semiconductor Index, or SOX. The SOX has a gain of 24.7% year to date, indicating the global economy may be poised for a surprising growth spurt because the semiconductor industry's chips are components of almost every product consumers buy, from household appliances to handheld devices.

Broadcom (AVGO) , Intel (INTC) , Micron Technology (MU) , Qualcomm (QCOM) and Skyworks Solutions (SWKS) are five of the 30 components of the SOX that have bull market gains from their lows of early this year.

The weekly charts show a red line through the price bars, which are the key weekly moving averages (five-week modified moving average). The green line is the 200-week simple moving average considered the "reversion to the mean."

The study in red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicates overbought and readings below 20.00 indicates oversold. A negative weekly chart shows the stock below its key weekly moving average with weekly momentum declining below 80.00 in a trend towards 20.00.

Here's today's scorecard for the SOX and the five big chip companies.

 

Here's the weekly chart for Broadcom.

 

Courtesy of MetaStock Xenith

Broadcom trades at $177, up 21.9% year to date and in bull market territory 54.9% above its Feb. 11 low of $114.25.

The weekly chart for Broadcom is positive with the stock above its key weekly moving average of $171.86. The stock is well above its 200-week simple moving average of $96.97. The weekly momentum reading is projected to rise to 65.52 this week up from 64.19 on Nov. 4.

Investors looking to buy Broadcom should consider doing so on weakness to $122.44, which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should do so by selling strength to $181.47 and $183.34, which are key levels on technical charts until the end of this week and until the end of 2016, respectively.

Here's the weekly chart for Intel.

 

Courtesy of MetaStock Xenith

Intel trades at close to $35, up 0.8% year to date and in bull market territory 25.5% above its Feb. 11 low of $27.68.

The weekly chart for Intel is negative with the stock below its key weekly moving average of $35.42 and well above the 200-week simple moving average of $29.59. The weekly momentum reading is projected to decline to 36.92 this week down from 49.01 on Nov. 4.

Investors looking to buy Intel should consider doing so on weakness to $32.56, which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should do so by selling strength to $36.84 and $38.25, which are key levels on technical charts until the end of this week and until the end of November, respectively.

Here's the weekly chart for the Micron Tech.

 

Courtesy of MetaStock Xenith

Micron trades around $17, up 23% year to date and in bull market territory 87% above its Jan. 20 low of $9.31.

The weekly chart is neutral with the stock above its key weekly moving average of $16.95 but below its 200-week simple moving average of $19.88. The weekly momentum reading is projected to slip to 72.31 this week down from 76.52 on Nov. 4.

Investors looking to buy Micron should consider doing so on weakness to $13.28, which is the 200-day simple moving average. Investors looking to reduce holdings should do so by selling strength to $18.27 and $19.18, which are key levels on technical charts until the end November and until the end of 2016, respectively.

Here's the weekly chart for Qualcomm.

 

Courtesy of MetaStock Xenith

Qualcomm trades around $68, up 36.6% year to date and in bull market territory 61.6% above its Feb. 11 low of $42.24.

The weekly chart for Qualcomm is neutral with the stock above its key weekly moving average of $66.37 and above its 200-week simple moving average of $65.59. The weekly momentum reading is projected to decline to 71.79 down from 74.02 on Nov.4.

Investors looking to buy Qualcomm should consider doing so on weakness to $65.59, which is the 200-week simple moving average. Investors looking to reduce holdings should do so by selling strength to $70.66 and $71.03, which are key levels on technical charts until the end of 2016.

Here's the weekly chart for the Skyworks.

 

Courtesy of MetaStock Xenith

Skyworks trades at $77, up 0.7% year to date and in bull market territory 41.9% above its Feb. 11 low of $54.50.

The weekly chart is neutral with the stock above its key weekly moving average of $75.64 and above its 200-week simple moving average of $57.70. The weekly momentum reading is projected to slip to 70.55 this week down from 74.68 on Nov. 4.

Investors looking to buy Skyworks should consider doing so on weakness to $67.01, which is a key level on technical charts until the end of 2016. There is a monthly pivot at $77.03. Investors looking to reduce holdings should do so by selling strength to $85.98, which is a key level on technical charts until the end of this week.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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