Sold some AMAT today, entered orders to sell more (in equal-$ amounts) every 1$ on up, till I am out of AMAT. I will continue to buy the dips, but only for ST trading positions (holding period of weeks to months, not years). Since KLIC is a much better trading vehicle than AMAT, I doubt I'll be buying back AMAT, till the next downcycle.
SOX: since bottoming in November 2008 at 167, the SOX has been in a bull market, 2 years old now. Since we just took out the April 2010 high, the SOX may have another leg up, possibly all the way to 550 (the triple tops of 2004,2006,2007). If that happens, I will sell steadily into that rally, and probably start shorting. I doubt we get above 550 in this bull market (very strong resistance). I can imagine a list of things which could drive the SOX back down below 250. Therefore, the risk/reward balance tilts steadily worse, from here on up for the semis and semi-equips. When selling the upcycle, it's better to be early than late.
AMAT underperformed other semi-equips, largely because of its big failed bet on amorphous silicon solar equipment. On the next upcycle, that shouldn't hold the stock back, so I still like AMAT for the LT. Evan though amorphous silicon was a bust, AMAT actually is doing very well selling to the crystalline silicon solars. Solar will be a cyclical roller coaster, just like semi-equips, but hopefully the 2 cycles won't coincide.
KLIC will probably go below $5 on the next downcycle, so shorting KLIC above $8, and every $0.50 on up, looks like a good bet. Any move above $8, I'm certain, will be given back eventually, if I have the courage to hold through the inevitable wild gyrations of this stock. If I short at $8, I have to be prepared to keep shorting more, all the way up to $12 (the 2007 high).  |
