Semiconductor stocks just can’t catch a break.
I recently shared that my scans unveiled some short-side opportunities in the semiconductor space, with a notable options opportunity in Lam Research (NASDAQ:). This week, another LRCX play hit my screens.
If you’ll recall, my initial recommendation was in the LRCX Dec 30 Puts. This time around, my analysis revealed there’s some nearer-term trading setting up.
Buy the LRCX Nov 30 Puts at 80 cents or lower.
You know I like to have a plan before taking any trade. After entry, take profits if the stock price hits $28.90, or if the option climbs to $2.10. Cut your losses and exit the trade if the stock price closes above $33.30, or the option price trades through 50 cents.
It’s not unusual for my scans to reveal more than one opportunity in the same name, but just be sure you’re not over-allocating in any one trade — especially if your portfolio is overly biased to one side. But there’s no denying that LRCX is in some “bad” company.
Applied Materials (NASDAQ:), Texas Instruments (NASDAQ:) and QLogic (NASDAQ:) got pinned as problem stocks in my latest results.
Cypress Semiconductor (NASDAQ:) and Xilinx
(NASDAQ:) are on my sell watch list.
NVIDIA (NASDAQ:), Intel (NASDAQ:), Advanced Micro Devices (NYSE:) and Avnet (NYSE:) round out the list as among the weakest in the short-term.
It appears the low-hanging fruit is in the semis, and they are starting to rot — pick some puts to take advantage of it.
Ken Trester is editor of the popular program. Trester has been trading options since the first exchanges opened in 1973.
