Semiconductor stocks continue to consolidate its position as one of the best performing industries this year, despite the uncertainty surrounding the coronavirus of the recovery and the escalation of tensions between Washington and Beijing. The negotiating group to almost 5% in 2020 compared to the S&P 500 4.64% decline.
The Stocks of the industry as a whole added to gains on Tuesday after Bank of America said that secular and structural growth drivers continue to provide support to semiconductor companies, as well as the tensions mount between the two economic superpowers. “Longer term, we believe that the semi-finals will play a critical role in the new digital economy, which is built on the treatment, storage, and networking capabilities enabled by this very cost-effective, consolidated and disciplined sector,” analyst Vivek Arya said, per CNBC.
Swing traders who wish to play in the group, the bullish momentum now should add these three semiconductor stocks to their watch list. Below, we take a closer look at each company and explore the trading opportunities.
Texas Instruments Incorporated (TXN)
Texas Instruments Incorporated (TXN) manufactures and markets semi-conductors, focusing on the automotive industries and markets. The manufacturer of chips used in Computers, communications equipment, and other electronic devices, reported first quarter earnings per share (EPS) of $ 1.24 to deliver 23% earnings surprise. Analysts credited the back line beat for the clients of the storage components in order to avoid possible supply disruptions caused by the COVID-19 pandemic. While Texas Instruments ‘ stock fell 3% year to date (YTD), it has increased by 11.81% over the last month, as of June 3, 2020. Investors also receive a 3.05% dividend yield.
After a decline below the psychological $100 level to the height of the market sell-off, the stock has recovered the lion’s share of its 30% of the pandemic of diving. The buyers have continued to rally Tuesday, with the closing price comfortably above the 200-day simple moving average (SMA) for the first time since the end of February. Swing traders who enter here should look to take profits near key overhead resistance at $132.50 and to protect to the downside with a stop-loss order placed just below the 200-day SMA.
QUALCOMM Incorporated (QCOM)
San Diego QUALCOMM Incorporated (QCOM) designs and markets semiconductors used in smartphones, networks, applications, and global positioning system products. The manufacturer of the chip is well positioned to continue its growth by investing in startups engaged in the artificial intelligence (AI), digital health and enterprise software. Last month, KeyBanc upgraded the stock from “sector weight” to “overweight,” noting that the company may benefit from recent export restrictions placed on Chinese semiconductor manufacturer HiSilicon Technologies Co. Ltd. As of June 3, 2020, QUALCOMM stock has a market capitalization of $95.20 billion dollars, the rate to 3.26%, and is trading almost 12% higher in the past month.
The price action has finally broke out above a month period of consolidation yesterday, in a move that could trigger further buying interest in the weeks to come. Those who trade the breakout should consider setting a profit target between $92.50 and $95 – a zone that can find the resistance of the distinguished November and January swing highs. Keep a stop order under this month-down to $79.24 to protect against a sudden reversal.
Qorvo, Inc. (QRVO)
Qorvo, Inc. (QRVO) specializes in chips used to power mobile devices, networking equipment, military applications, and the Internet of things (Iot) technology. Greensboro, North Carolina chip giant, which has surpassed Wall Street expectation for the last 14 consecutive quarters, posted a first quarter EPS of $1.57, up from $1.22 in the prior year, amid increased demand from 5 g of the infrastructure and terminals, with the strength in his IoT, and defense companies. Trading at $109.68, the stock has returned 17.75% YTD, outpacing the semiconductor industry, on average, during the same period by nearly 7% as of June 3, 2020.
Qorvo shares have shown an upward trend since the end of March, with few obstacles to the dotted blue trend line. The Gains accelerated in recently constructed ascending triangle Tuesday, which may give rise to a test of the double top pattern around $118. Those who post for a decision that should reduce losses if the stock fails to hold above the top trend line of the triangle, as this invalidates the breakout trade setup.