28Dec10:55 amEST

Keeping the Holiday Chips Honest

The semiconductors, led by star NVIDIA Corporation, have undoubtedly been a key contributor to the bull case for a good while now.

Yesterday's launch in NVDA gave rise to a ballyhoo regarding how foolish bears were for trying to short the name and how potent the name truly was. Even this morning at the open, too, saw NVDA make fresh highs. But then the name sharply reversed lower, taking the SMH down with it, possibly along with the Nasdaq in general. 

Thus, we have a bit of a sobering morning session playing out, with the NVDA weakness a bit of cautionary sign. I remain short QCOM as a way to play a prospective NVDA shakeout, rather than outright shorting NVDA during its rocket-ship launch. QCOM, below on the daily chart, could easily correct down to the low-$60s if NVDA takes the SMH for a quick ride down for a few days, while my risk on the trade is likely contained due to the lower beta nature of QCOM. 

As for the long side, I want to see if names like NFLX can recover a bit from the morning selling. AMZN is holding green but likely needs a push back over $780 for me to get interested. 

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