Q2 STOCKS TO BUY

Sector Scorecard: 2 Swooning Semiconductor Stocks

Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) are two semiconductor stocks struggling on the charts

Aug 6, 2015 at 12:07 PM
facebook X logo linkedin


It's been a forgettable year for semiconductor stocks. Of the 49 names we track -- including blue chip Intel Corporation (NASDAQ:INTC) and rival Advanced Micro Devices, Inc. (NASDAQ:AMD) -- just four are currently perched atop their 80-day moving averages, and the typical year-to-date loss registers at 3.7%. Along similar lines, the Market Vectors Semiconductor ETF (NYSEARCA:SMH) has tumbled more than 6% in 2015. Having established the sector-wide weakness, let's dig deeper on the two aforementioned stocks, INTC and AMD.

INTC has surrendered more than 20% of its value this year, last seen at $28.94. More recently, since hitting a year-to-date high of $34.75 in late May, the stock has tumbled 16.7%, and has been consolidating atop its 10-day moving average in recent weeks.

For some reason, though, options traders have failed to acknowledge INTC's technical troubles. During the last two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has amassed a call/put volume ratio of 2.93 -- with long calls nearly tripling puts. More significantly, this reading ranks in the 97th annual percentile, indicating speculators have scooped up bullish bets over bearish at a near-extreme rate. A capitulation among these optimists could result in headwinds.

The brokerage crowd has tilted bullishly toward Intel Corporation, too. Seventeen of 30 analysts rate the stock a "buy" or better. This could pave the way for future downgrades, exacerbating selling pressure.

Shifting our focus to AMD, this security has also lost about 20% year-to-date, trading at $2.13. Looking more closely at the charts, a recent rebound has been contained by the stock's 50-day moving average, which could send the shares on their next leg lower.

Future losses would be less unexpected for AMD than INTC, based on Wall Street sentiment. For one, nearly one-fourth of Advanced Micro Devices, Inc.'s float is dedicated to short interest -- the equivalent of roughly seven sessions of activity, at typical volumes. For another, over three-quarters of analysts tracking the shares have designated them a "hold" or worse, and a number of price-target cuts have hit the wires in recent weeks. In short, expectations for AMD are already quite low.
 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter