Take profits and rebalance extended semiconductor stocks
The guest argued that while the semiconductor story remains fundamentally bullish, the sector is highly overbought and due for a correction.
The argument
The guest compared the parabolic move in semiconductors to a previous run-up in gold, suggesting that taking profits and rebalancing back to target allocations is prudent to prepare for better buying opportunities during an eventual correction.
The thesis, stress-tested
✓ What validates it
- ✓A price correction or consolidation period in major semiconductor indices
▸ Risks discussed
- ▸Stronger-than-expected earnings reports could prolong the parabolic extension
Hear it yourself
"But, you know, don't forget that if you're long semiconductors, it's fine. The story is very bullish right now, but those stocks are very extended. And if you take a look at more of a longer term picture, it kinda looks like what we were talking about with gold when gold was just going straight up."
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