NEW BULLISH Plays

Semiconductor ETF - SMH - close: 37.37 change: +0.47

Stop Loss: 35.90
Target(s): 40.00
Current Gain/Loss: unopened

Entry on May -- at $--.--
Listed on May 02, 2013
Time Frame: 3 to 6 weeks
Average Daily Volume = 2.6 million
New Positions: Yes, see below

Company Description

Why We Like It:
The semiconductor sector continues to show relative strength. Today's rally has pushed the SOX semiconductor index past its 2012 peak. The SMH is also hitting new 52-week highs.

This is a simple momentum trade. Bears could argue the group is short-term overbought. Therefore I am suggesting we keep our position size small to limit our risk. I am also concerned that the jobs report tomorrow morning, which comes out before the opening bell, could spark a market sell-off. Therefore, I am suggesting a trigger to buy the SMH at $37.55. If triggered at $37.55 our short-term target is $40.00 although traders could aim for the 2007 high near $41.40 instead. FYI: The Point & Figure chart for SMH is bullish with a $44.00 target.

I am listing our stop loss at $35.90 but more conservative traders may want to use a higher stop.

Trigger @ 37.55 *Small Positions*

Suggested Position: buy SMH @ (trigger)

Annotated chart:

Weekly chart: