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Dr. Kris
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Dr. Kris hails from the land o' lakes, beer, bratwurst, and Bucky Badger. She traded in her cheese hat for a propeller beanie and has never looked back. She has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her... More
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  • Market Notes: Semis Lighting Up -- June 18 0 comments
    Jun 18, 2013 7:05 PM | about stocks: VTSS, MU, SOXX, INTC, AMAT

    Who would have thunk that trading action the day before the Fed's interest rate decision would have been so bullish? Pas de moi, that's for sure. It's unclear why the bulls have started to party early unless someone knows for sure that the word "taper" won't even be hinted at tomorrow. But if it is, I do expect the bears to do some serious gate-crashing. One thing that may concern the bulls is today's lack of participation in the VIX. A one percent move in the Dow Transport Index (DTX) should have triggered a big drop in volatility but we didn't get that. What the bulls want to see is the VIX move back under 15...or do they?

    While an elevated VIX seems bearish on the surface, if you look at it from a contrarian point of view you might realize that a high VIX gives any potential rally a lot more room to run than a VIX that is already low. Well, whatever the real reason turns out to be, one thing we can likely count on is volatile trading following the Fed's decision coming out at 2:00pm ET and especially during Bernanke's press conference that will follow.

    Market Highlights: Semiconductors are lighting up
    It's been a while since the semis have been in the spotlight but it looks as if it's their turn to shine as evidenced by today's breakout in one semiconductor etf (SOXX, $65). The larger players in this industry group all rallied with Applied Micro (AMCC, $9.7) and Vitesse (VTSS, $2.75)heading up the leader board with 20% gains. There was no official news to account for the move other than a rumor of a possible bid for AMCC.

    Surfing the charts of others in the industry I found two that look especially technically compelling: Micron Technology (MU, $13.75) and Applied Materials (AMAT, $15.97). Both stocks have been rising steadily since the middle of November with AMAT gaining 60% and MU gaining 165% during this time frame. MU recently hurdled $12 resistance to hit a new six year high while AMAT is currently testing $16 resistance. A break above that should propel it to the $17 level in the area of its previous high. Of the two charts, I prefer Micron's and am putting a technical price target of $17 on it (based on its 2009 inverse head and shoulders pattern). That's an increase of nearly 25% over today's price.

    Note that many players in this group are undervalued compared with the rest of the stocks in the trading universe including industry leader Intel (INTC, $25.47) whose trailing P/E is a measly 12. Intel has recently become somewhat of a media darling and if you'd like to pick up some shares in this tech giant I would wait until it clears $26, a point of resistance. Also in the plus column is the company's juicy 3.5% dividend. As always, do your own research before investing!

    ***Important Note***: Dr. Kris will be out of town for the rest of the week attending her nephew's college graduation. Because of this, there will be no blogs or Subscriber Updates until next Monday.

    Subscriber Notes: There are two new Channeling Stocks.

    Stocks: VTSS, MU, SOXX, INTC, AMAT
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