Things just feel easier when semiconductors are doing well. While deciphering markets certainly isn’t truly any less difficult during one leadership regime over another, a strong semiconductor group can certainly be quite compelling. Perhaps due to recency bias of 2023 & 2024, watching representatives like SMH storm ferociously back to challenge all-time highs gives merit to the idea that growth names, particularly those driving artificial intelligence, are in the driver’s seat. All that said, it can certainly feel intimidating opening/adding to positions as we sit just three months away from 2025 lows. Today’s pulse will briefly discuss how you might look to approach the sector within your portfolio and highlight how you can source names that might look attractive.

We opened today’s piece with a brief comment on semiconductor’s dominance in 2023 & 2024. Participation today actually clocks in at a higher mark as of June 27th than at any point since late 2021, seeing ^BPSEMI sit at 70% as we wrap up the second quarter. Said more plainly, roughly seven of every 10 semi stocks trade on a PnF buy signal, now well above washed out territory (6%) from the start of April. This reading is tied with Gas Utilities as the highest Bullish Percent readings across the 41 different NDW sectors- another feather in the cap as upside participation continues to improve.

Having advanced notably off 2025 lows, representative SMH sits extended well on a column of X’s as it sits at all-time chart highs around $280. Holding a strong 4.48 fund score, the only true gripe with the fund here is the lack of support nearby- it now sits roughly 33% away from the next level of “traditional” PnF support at $186. Regardless, more sensitive charts (3-point, not pictured below) suggests a range of viable support around $237… nearby but still a ways away. In these kinds of scenarios, we typically suggest waiting for a bit of normalization, although more aggressive clients are still broadly fine to dip your toes in on this stem.

Commentary for most of the larger names you might be thinking of when semiconductors are mentioned (NVDA, AVGO, AMD, TSM etc.) is largely the same. Upside action has been swift and most are vastly overextended around current levels. Again, we would expect some normalization in the near-term. While similarly overbought, KLA Corp KLAC continues to demonstrate impressive technical leadership within the semiconductor sector, breaking back into positive trend as of April and storming to new all-time highs in mid-June. This coincides with the name developing a clearer technical picture, supported by strong long-term relative buy signals against the market SPXEWI since 2011 and against semiconductor peers since 2019. Up nearly 40% this year, the perfect 5/5’er sits in the third position within the semiconductor sector matrix. The recent reversal back into X’s helps solidify some localized support above prior resistance… a net positive as the name is a tad overbought here. Those seeking exposure to this semiconductor leader may consider waiting for the trading range to normalize through pullbacks to said support, or confirmation of continued upside momentum with a break to new highs at $928. Use the alarm clock button to be notified of any changes.

Domestic Equities have rallied to number 1 within the NDW DALI Asset Class Rankings on the back of a positive week for the asset class. The week began with Domestic Equities moving to number 2, but after picking up a signal from both Commodities and Cash following Thursday’s action, the asset class was able to climb to first. It is worth noting that this marks the third change to the number 1 asset class in two weeks’ time and the top three asset classes reside within three signals, so to say US equities have emerged as the true leader would be a bit premature. NDW acolytes will await further signal confirmation before making changes to current allocations to any of the three offensive assets.

Through Thursday’s close the seven major US Equity indices were up just shy of 3% on average, led by the Nasdaq-100 Index (NDX) up 3.80%.  After initially marking a new all-time price high earlier this week - matching the point and figure trend chart high – Thursday’s action saw the index improve upon those highs and move to 22400 on the chart. This action brings the weekly distribution reading to its highest in just shy of 12 months near the top of the 10-week trading band. The further into overbought territory indices may move, the potential for a pullback or period of consolidation increases. While when and to what extent that pullback or consolidation may be, it would take a move below 21800 to see a reversal into a column of Os.

Given the Nasdaq-100 rallying to a new all-time high, the lists below highlight the roughly one-fifth of the underlying index holdings that currently trade at all-time chart highs or are within one box of chart highs. Like the Index itself, some of the stocks shown trade in overbought territory (Weekly OBOS (%) > 70%) so those seeking exposure to these positions are best served by looking for a pullback or price consolidation into a more actionable range within the 10-week trading band (i.e. Weekly Distribution (OBOS)).

Two of the stocks that are currently actionable even at all-time chart highs are Take-Two Interactive Software (TTWO) and Palantir (PLTR). Both stocks are 5 for 5’ers and have maintained buy signals since the first half of April.

TTWO has traded in a positive trend on its point and figure trend chart since August 2024. The stock has possessed long-term relative strength against the market and peer group for more than 18 months while currently ranking within the top quintile of the Leisure sector matrix. After giving a fourth buy signal and high at $244 earlier this week, TTWO is actionable here at highs or on a pullback to the upper $220 range. Initial support lies at $220, while additional may be found in a stair-stepping fashion between $198 and the lower $210s.

PLTR moved back into a positive trend shortly after returning to a buy signal in April and this week kicked off with a eighth consecutive upon the break at $146. The stock has possessed long-term relative strength against the market and peer group for more than 2 years and currently ranks within the top decile of the Software sector matrix. Intraday action Friday brought the trend chart back into a column of Os and an actionable price range as the stock fell to $138.  Initial support lies in the mid $130s, while additional may be found at $120.

Featured Charts:

Portfolio View - Major Market ETFs

Daily Option Ideas for June 27, 2025