3 Hot Chip Stocks For Your Watch List

Chip stocks are hot. But that doesn’t mean investors should chase them, especially since many of the top names are well extended past proper buy points. Chipmakers ranked No. 2 out of IBD’s 197 industry groups in Monday’s issue, up from No. 4 six weeks ago. Three made that day’s Stock Spotlight screen: Qorvo (NASDAQ:QRVO), Skyworks Solutions (NASDAQ:SWKS) and Taiwan Semiconductor (NYSE:TSM). All three share a highest-possible 99 Composite Rating and are in various stages of stock price action.

Qorvo may be working on a cup-shaped base with a potential buy point at 78.15. It’s in the sixth week of its current consolidation, a stage three pattern, which kicked off following a 50% run-up from a flat-base breakout in late October.

The maker of chips used in mobile devices, wireless networks and metering devices has scored triple-digit or higher profit growth the past nine quarters, after seven straight quarters of declines. Qorvo said last week it’s expanding its product for China and other developing markets.

Skyworks is trading at record highs and is overextended past its last breakout as well as subsequent rebounds off its 10-week moving average. There’s no current buy point, but staying alert for a new base would be prudent.

Skyworks’ chips enable wireless connectivity in smartphones, tablets and other devices. Profit and sales growth accelerated the past four quarters. Canaccord Genuity on Monday lifted its price target to 102 from 90, citing the chipmaker’s grip on the mobile market.

Taiwan Semiconductor gapped down and fell nearly 3% in fast trade before finding support at its 50-day moving average. Shares have almost given up an 11% gain from a mid-January breakout from a double-bottom base, but remain almost 3% above a 22.84 entry. Pacific Crest Securities on Monday downgraded the stock to underperform from sector perform, citing a potential loss of some of its Apple (NASDAQ:AAPL) business.

Chip stocks are hot. But that doesn’t mean investors should chase them, especially since many of the top names are well extended past proper buy points. Chipmakers ranked No. 2 out of IBD’s 197 industry groups in Monday’s issue, up from No. 4 six weeks ago. Three made that day’s Stock Spotlight screen: Qorvo (NASDAQ:QRVO), Skyworks Solutions (NASDAQ:SWKS) and Taiwan Semiconductor (NYSE:TSM). All three share a highest-possible 99 Composite Rating and are in various stages of stock price action.

Qorvo may be working on a cup-shaped base with a potential buy point at 78.15. It’s in the sixth week of its current consolidation, a stage three pattern, which kicked off following a 50% run-up from a flat-base breakout in late October.

The maker of chips used in mobile devices, wireless networks and metering devices has scored triple-digit or higher profit growth the past nine quarters, after seven straight quarters of declines. Qorvo said last week it’s expanding its product for China and other developing markets.

Skyworks is trading at record highs and is overextended past its last breakout as well as subsequent rebounds off its 10-week moving average. There’s no current buy point, but staying alert for a new base would be prudent.

Skyworks’ chips enable wireless connectivity in smartphones, tablets and other devices. Profit and sales growth accelerated the past four quarters. Canaccord Genuity on Monday lifted its price target to 102 from 90, citing the chipmaker’s grip on the mobile market.

Taiwan Semiconductor gapped down and fell nearly 3% in fast trade before finding support at its 50-day moving average. Shares have almost given up an 11% gain from a mid-January breakout from a double-bottom base, but remain almost 3% above a 22.84 entry. Pacific Crest Securities on Monday downgraded the stock to underperform from sector perform, citing a potential loss of some of its Apple (NASDAQ:AAPL) business.

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