How To Buy The Best Sector At A Discount

I’m not a big fan of buying new positions on Friday’s in August, but this ETF is worth considering

The last time we traded this it went straight to its target, which was 3x what the trade’s stop was risking.

If the market rally continues, this will be a leader, and I expect the same result or better.

https://lh5.googleusercontent.com/ETLTf57yCOh54ggNGmyNOoaShd2lHswAo9t_6R4CoQoxG6GiCGXb25gUv8XmDsGaXhKX9nTi46hLJ_sANMizbL1iroNY7xrUUDrepRlgIiVVwGOQJi1Q1DMnMqOuLEsgpek4-Jnh

You may not be surprised to see the chart of SMH below.

The Semiconductor sector was a leader in the market before the recent correction and its trend is still one of the strongest in the correction.

The setup up here is a simple buy the bounce off of a 50-day moving average.

The best stop is under the correction low of $107.41. So I’ll put the stop under $107.

The market is down as I write this Friday morning. Normally I’d suggest to wait for some strength, but in this case, I think buying weakness is worth the risk.

The buy zone is between $110 and $113.5.

This zone could be used today, Friday or Monday.

A target to take some profits would 120, and that will result in a gain of about 3x your stop’s risk.

There is still down side risk in this market, so make sure you position size prudently! 

Trade smart,

Rick Nartarian, Chief Investment Officer
Darwin Wealth Creation