Odin's Warning: Semiconductor Stocks Face Ragnarok!

The Gods Have Been Kind... Until Now

Valhalla calls for warriors but what of the market? Since the spring thaw these semiconductor stocks have soared higher than my longship sailing into the sunset. The Philadelphia Semiconductor Index thinks it's mightier than the S&P 500 outperforming it by a great margin. But even a Viking knows when the feast is over. Like a shield wall that's stretched too thin these stocks now look as overextended as Floki after a few too many horns of mead.

Broadcom's Fall: A Bad Omen?

Last week Broadcom (AVGO) delivered their earnings like a wounded messenger. The news was not received well with the stock dropping like a rock. The DeMARK Indicators are sounding their horns of warning signaling a short term sell. Even the daily stochastic oscillator and MACD indicator agree. Seems like a deeper pullback is brewing like a storm gathering on the horizon. As I always say: 'I don't believe in the gods' continued grace… I believe in a hard winter.'

The 50 Day Voyage to Support

They say the 50 day moving average is near $204 a 17% drop from where we stand. That's a long voyage for any longship! This earnings driven sell off could be a temporary setback a mere squall in the grand scheme. But remember even small waves can capsize the unprepared. A failed breakout near $252 leaves resistance standing tall. The long term view however suggests AVGO is merely sailing within a trading range with resistance still standing tall.

Nvidia's Exhaustion: Time to Retreat?

Like AVGO Nvidia (NVDA) the industry's prized stallion is showing signs of fatigue. The DeMARK Indicators are whispering of a near term retracement following an underwhelming earnings response. Is this the beginning of a head and shoulders pattern resembling a fallen warrior’s helmet? The gods only know what the long term holds.

Momentum Wanes: The Tides Are Turning

Long term momentum has grown weak in both AVGO and NVDA. It is like when my men lose the will to raid. A pullback is likely and could lead to a very bearish pattern for NVDA. These semiconductor stocks are going to need to prove they can weather this storm and keep afloat for much longer.

Prepare for Winter or Prepare to Die!

So heed my warning fellow Vikings of the market! The signs are there – the gods are restless. Prepare for a potential pullback like preparing for a long harsh winter. Or you might say "How I long to be sailing into the unknown..." But prepare well for the unknown can be as treacherous as the North Sea. Remember fortune favors the bold but wisdom guides the prudent.