The “chip sector” has led the line in the US, with the US-traded iShares Semiconductor ETF (SOXX) a great tradeable illustration. To understand its make up, Broadcom Inc, Advanced Micro Devices, Micron Technology, Nvidia and Intel make up ~35% of the ETF. Again as we said earlier earnings drive markets and in the US the influential semiconductor stocks are helping lift most indices to new highs whereas locally the banks are weighing heavily on the ASX. However, we caution this is a very crowded trade having enjoyed record inflows last week, hence we wouldn’t be chasing strength at this stage.
- We like the SOXX ETF but some consolidation in the $US450-500 region wouldn’t surprise – technically buying the next $US50 makes sense.
MM is bullish towards the SOXX ETF ~$US450
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