The three microchip stocks in this analysis all look as if they are ready to rise again on Tuesday, according to the action we have seen so far in the premarket session.
Advanced Micro Devices looks as if it is going to gap higher on Tuesday as pre-market trading has been fairly bullish. This is a good sign considering that at the end of the Tuesday session, we get the earnings call. So, it shows that people are at least relatively positive in this market. And it could very well find itself trying to go to the $187.50 level, a previous major level of resistance.
Short-term pullbacks are probably thought of as opportunities at this point, but we also have to keep in mind that the earnings call could change a lot of things. If we do start to sell off, the $155 level is an area where I would anticipate a certain amount of support. Earnings estimates come in at just under 48 cents a share with revenue expected to be at $7.41 billion.
Intel continues to bump along the bottom as it is trying to find the floor. And it’s probably worth noting that we have been in this consolidation area for about a year. So, we are in an area where I think value hunters are trying to jump in and take advantage of this range bound market. And certainly, at this point in time, a small bounce would not be out of the realm of possibility. This is especially true if other microchip manufacturers continue to gain. It might get a little bit of charity and a helping hand from other markets.
Finally, Nvidia looks like it’s going to jump right off of the bat here on Tuesday as pre-market trading has been bullish. And ultimately, this is a market that I believe is going to try to crack all-time highs yet again. But keep in mind, there is an earnings call coming, but it’s not until the 27th. So, we have plenty of time.
If we start to see good reports out of other microchip companies, that means Nvidia will probably jump in concert with those as well, as Nvidia is by far the biggest leader here. Short-term pullbacks should continue to be buying opportunities with the $175 level offer and a potential support level right along with $165.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.