Do You See What I See?

Hi Shoppers,


I’m kicking off the week talking about the chip shortage crisis — again.


Sorry, but I think it is very important.


You see, chip manufacturing is a very particular undertaking.


Suppliers can’t just find any old warehouse or factory and start spitting these things out.


The chips are made in special facilities called semiconductor fabrication plants — or fabs


These fabs can cost billions of dollars and take up to two years to build.


The environment where chips are actually created is known as a “clean room” and cannot have any dust particles or vibration …


The temperature and humidity also need to be controlled to reduce static electricity.



A clean room at NASA


Everyone from car and gaming component manufacturers to cryptocurrency blockchain producers are in need of chips …


The end demand for these things is nowhere in sight!


On My Radar


I’m adding the following stocks to my radar, as these companies make pieces of expensive equipment — ranging from $700,000 to $4 million — used in fabs.


– Lam Research (Ticker: LRCX)

– Advantest Corp (Ticker: ATEYY)

– ASML (Ticker: ASML)

– Teradyne (Ticker: TER)


A New Trade Idea


I see a doji in Applied Micro Devices (Ticker: AMD).



I know … I lost money on my last trade idea in AMD.


But, I got out in time to be able to re-enter with a new trade idea.


Remember, you always want to be able to trade again the next day — so stick to your trading plan.


If AMD opens today higher than $78.52, which is Friday’s close, I am going to buy a call vertical spread.


Looking at the options, I would like it to be a nearer term expiration, so that I am not paying any extra premium.


I like the Mar19 79/86 call spread paying $1.90-$1.95.


I am buying the 79 calls with an implied volatility of 42.99 and selling the 86 calls with a 44.69 implied volatility.


Like I said, I will only be executing this spread if AMD is opening and trading higher than Friday’s close.


I will take my losses if the spread trades down to $1.20.


I think this spread has great potential on the upside as AMD just traded $86 on March 2, four trading days ago.


Shoppers, also check out the doji in TER. Follow the same guidelines and there could be a great opportunity there, as well.


Have a great week!


Thanks for Reading … See You Next Tuesday!


Licia Leslie

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