I don't think Joe Osha is a very good analyst. And Brett Hoddess took Merrill clients over the cliff last fall as he tried to stuff the last banking deals down everyones throats...
That said, Joe's upgrade did help the SOX close above its 200-day moving average. It needed to break 626.05 and it closed today at 636.78...
Bookings cancellations climaxed in March and since then, the semiconductor market has clearly stabilized, as cancellations have stopped and some are getting orders. Joe just waited for August as the year over year data is very likely to bottom out this month because of easier comparisons.
TXN, XLNX, INTC, LLTC and MXIM are all still below their 200-days but ADI, ALTR, MU, AMAT, MCRL and MOT have all gone through on the upside, many for the first time in a year.
Moreover, companies with very fast product cycles like GSPN and BRCM look especially attractive as inventories at their customers go obsolete rather quickly. This overcapacity talk is overrated. This isn't sheet metal sitting in a warehouse. Like technology stock call options, a lot of semiconductors sitting on customers books are going to expire worthless. |
