SMH trade ideas
Opening (IRA): SMH August 19th 150 Short Put... for a 1.54 credit.
Comments: Adding another unit of semiconductors here (IVR/IV 72/47) in weakness/higher IV, targeting the <16 delta strike paying around 1% of the strike price in credit in the August monthly (the weeklies aren't all that liquid). Still have the August 19th 175's on.
$SMH - Head and shoulder break down$SMH has been in down trend from head & shoulder breakdown. The next support point would be around $177 which is 1.618 fib extension area as well as head and shoulder measured move projection. If $177 area doesn't hold we could see $151 area which is the pre-pandemic high area. The worst case is $108 which should be absolute bottom if we reach there.
Target 1 - $177
Target 2 - $151
Target 3 - $108 (absolute worst case like China invades Taiwan kind of situation)
Disclaimer - Not an investment advice.
MACRO bearish thesis semiconductorsHey all,
I wanted to share my thoughts with you guys regarding semiconductors as that was one of the sectors people were most bullish on back when the market seemingly could only go up. That is no longer the case. If you look at names like AMAT and TSM, the distribution on semiconductors is in the past, and now we are in the markdown phase(A lot of false breakouts and Wyckoff distribution looks across the board). Semiconductors are very cyclical stocks and are still relatively overvalued compared to the rest of the market. I am actually quite bullish on semiconductors over the short term and fundamentally, but I do anticipate names in the industry to resolve lower and rallies to be faded. As a bear, I would wait to short significant rallies- watch the next few weeks as I think semis are going to rally in July.
Opening (IRA): SMH August 19th 175 Short Put... for a 1.76 credit.
Comments: Targeting the <16 delta strike in the August monthly (53 DTE) paying around 1% of the strike price in credit. Adding a smidge of long delta back into my portfolio to keep my net delta happy using an ETF that is closely correlated with the broad market (SPY 3-month correlation of .92) instead of cluttering up my IWM, QQQ, and SPY short put ladders further.
Other ETF's to do this with: XLK (.97 3-month correlation), EFA (.90).
Opening: SMH June 17th 198/270 Short Strangle... for a 5.55 credit.
Comments: High IVR/high IV (80/46). Selling the 15 delta strikes on both sides. 5.55 credit on buying power effect of 23.58; 23.5% ROC as a function of buying power effect at max; 11.8% ROC at 50% max. As usual, will look to take profit at 50% max and/or manage sides on approaching worthless/side test.
Semiconductor ETF buySMH Semiconductor ETF is at a major support trendline (white dash) and EMA377 (blue line). SMH is a screaming buy now. Technically speaking, there is essentially no downside risk and plenty of upside reward at this entry point. Computer chips, also known as semiconductors, are the brains of products like smartphones, computers, cars, medical devices, digital cameras, TVs, washing machines, refrigerators, every appliance, LED bulbs, ATMs, trains, planes, the internet, communications, pretty much everything..
WASHINGTON, April 6 (Reuters) - The White House held a classified briefing on Wednesday with some U.S. lawmakers on the dire risks to the American economy from semiconductor supply chain issues as it pushes Congress for $52 billion in funding to subsidize production.
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4/24/22 SMHVanEck Semiconductor ETF ( NASDAQ:SMH )
Sector: Miscellaneous (Investment Trusts/Mutual Funds)
Market Capitalization: $ --
Current Price: $234.73
Breakdown price (hold below): $237.35
Sell Zone (Top/Bottom Range): $241.85-$261.90
Price Target: $206.40-$204.00
Estimated Duration to Target: 67-72d
Contract of Interest: $SMH 6/17/22 200p
Trade price as of publish date: $4.35/contract
Opening: SMH May 20th 215/280 Short Strangle... for a 5.30 credit.
Comments: Selling some nondirectional premium in semiconductors (implied volatility rank 60/30-day 41.2%) in the May monthly (42 days 'til expiry). 5.30 on buying power effect of 24.94 (on margin); 21.3% ROC at max as a function of buying power effect; 10.6% at 50% max.
Semi's attempting to break through resistance,what does it mean?The Semiconductor ETF SMH is meeting resistance here @ 260. The last several times the SMH index ETF met this trend resistance has resulted in a push to lower lows. Could this time be different? The MFI (Money Flow Index) seems to be suggesting it is a possibility. Although SMH is riding a downtrend, SMH price volume momentum is in overbought territory. A SMH break and close above 260 on a daily basis would end the SMH down turn. The next important area to watch would be 266. 266 is where major resistance resides. This is evidenced by the significant battle between bulls and bears previously waged there noted in Volume @ Price. The last time @ 266, the bears got the better of the SMH bulls. However, this SMH MFI is trending higher as opposed to lower. This is a canary in the coal mine to watch as this battle could have repercussions as to the future direction of the broad market trend and ensuing market leadership.