Cam Hui | Aug 13, 2014 07:28AM ET
As promised, further to my recent post where I indicated that I would write about some bullish ideas (see Momentum + Bull market = Chocolate + Peanut butter ).
On the weekend, I called for an oversold rally to start (see A tradable bottom?). In such an instance, the highest beta momentum group to play appears to be the semiconductor stocks. As the chart below of the relative performance of SOX to SPX shows, the semiconductor stocks have been displaying leadership qualities for all of 2014. The recent retreat, which was due to the minor pullback that we saw in the last couple of weeks, shows the group to have come down to a reasonable long entry point for traders to want to play the momentum game.
Disclaimer: I want to repeat my previous caveat that these are all different kinds of trade ideas encompassing different investment themes, different time horizons and different levels of risk. Not all ideas are suitable for everyone. While I have no positions in any of these trades at the moment, I could initiate a position at any time. Further, I know nothing about your portfolio or your risk tolerance. Do your own due diligence before putting on any of these positions.
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