Stock Trends

Semiconductor and homebuilders focus

Good morning,

This week’s Monday Morning Playbook highlighted two groups, semiconductors and homebuilders, which I believe are key to the broad market call.

After leading the market up and down, there are green shoots showing in both groups. Today, we’ll look at some improving charts from the bottom-up and see just how high they could run.

We’ll also look at:

• 2 important semiconductors that aren’t improving

• Notable takeaways from the S&B 20 Index

• Energy stocks hitting new highs

• Hot List updates

• and more!

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5 semiconductors showing improvement

AMD breaks a 6-month downtrend line

AMD broke above a 6-month downtrend line and closed above its 50-DMA for the first time since October on Monday. The stock lost 4% in yesterday’s selloff and has a lot of work to do but it’s a change in character that bears watching.

Micron holding up well but trapped below 200-DMA

Micron hasn’t broken below $84 despite at least four tries dating back to August. That’s good but you can’t buy a stock while the 200-DMA is still acting as such clear resistance.

ADI still holding the line

February’s false breakout in February turned out to be a canary in the coal mine but the stock deserves the benefit of the doubt if above $200.

LRCX and MPWR bottomed while the rest of the market was topping

Finally, two that are showing some of the most improvement and relative strength were two of 2024’s biggest disappointments. Lam Research and Monolithic Power System both bottomed in mid-November, right as the average stock was topping. They’re both below downward-sloping 200-day moving averages (so I’m not buying) but I can’t help but wonder if we are witnessing a first-in first-out dynamic when it comes to corrections in this group.

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2 semiconductors that aren’t improving