While most people consider the semiconductor shortage to be bullish for semiconductor stocks I believe there is a serious case for a bear scenario. With the supply chain this heavily disrupted it is possible that while margin will be high on individual sales the number of sales is lower considering the variance in the types of semiconductors that need to be purchased for different products as well as the increased competition that is going to exist between Semiconductor Manufacturers. To profit off of this thesis I will be purchasing SOXS Periodically until I believe the move may complete. I am viewing this as an ABC correction on SOX. High valuations need to be supported by revenue and next earnings will betray the earlier semiconductor stock boom that was spurred on by Covid.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.