Semi Mania

Please click here for an enlarged chart of Micron Technology Inc (NASDAQ:MU).

Note the following:

  • This article is about the big picture, not an individual stock.  The chart of MU stock is being used to illustrate the point.  Micron is the leader of the semi mania.  Micron is one of the three major manufacturers of high bandwidth memory.  The demand for high bandwidth memory for AI data centers has exploded.
  • The chart shows the steep move up in MU stock as the semi mania continues.
  • The chart shows the magnet for MU stock.
  • RSI on the chart shows MU stock is overbought.  Overbought stocks are susceptible to a pullback.
  • As full disclosure, MU is in our portfolio, long from an average of  $21.77. This morning, MU stock is taking another leg up on news that its competitor Samsung Electronics Co Ltd (OTC:SSNLF) is experiencing labor troubles. Samsung unions are threatening a walk out starting May 21.  Samsung produces about 3% of global memory.
  • For the time being, investors are oblivious to the following:
    • There has been triple and quadruple ordering.
    • There has been significant pull forward in demand from 2027 into 2026.
    • The increase in memory demand is likely to slow in 2028.
    • There are serious attempts to redesign models to use less memory.
    • Expanded production capacity will start coming online.
  • This morning, rising oil is hampering the double mania of semiconductors and reckless call option buying.  The reason is that President Trump has said Iran's latest proposal is "unacceptable."
  • There is significant optimism ahead of President Trump's visit to China.
  • Inflation data is ahead.  Consumer Price Index (CPI) will be released tomorrow at 8:30am ET.  Producer Price Index (PPI) will be released Wednesday at 8:30am ET.

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are neutral in Apple Inc (NASDAQ:AAPL).

In the early trade, money flows are negative in Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc Class C (NASDAQ:GOOG), Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), NVIDIA Corp (NASDAQ:NVDA), and Tesla Inc (NASDAQ:TSLA).

In the early trade, money flows are negative in SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust Series 1 (NASDAQ:QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (NYSE:USO).

Bitcoin

Bitcoin (CRYPTO: BTC)is range bound.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.