This Stock Is Set Up To Double Soon

The Semiconductors (SMH) have helped push the market back near new highs over the last couple of weeks.

However last week, SMH pulled back to its recent breakout level.

This has created a new opportunity in the one of the semiconductor stocks I have liked for some time.

Read below for this simple, but big opportunity.

As you can see in the chart below of Advanced Micro Devices (AMD), it has consolidated over the last several days.

At the same time, you can see the chart of SMH below which has retraced to support.

As a result, I expect the SMH to rally from its support at 109, and AMD to rally even stronger.

However, wait for an initial move higher. This is not a setup to buy blindly on weakness.

For SMH that means it must trade over $111.00, and for AMD you should wait for it to trade over $31.65. These two price points should break at around the same time.

If they are not both over their respective levels, I would wait.

The market is still tentative in its attempts to break out into all-time highs, so it’s important to be patient AND respect your stops.

In this AMD trade, the stop should be under $30, which has been a pivotal support and resistance level.

When AMD hits $34, I would move my stop to no-loss, but I would not take any profits until it hits $36.

After taking some profits at $36, I would use a wide trailing stop (15-20%).

This is a stock that could double if our Chinese trade issues get resolved.  

Additionally, if you’re an options trader, this is a stock you should be focused on for longer-term swing trades for as long as it’s over $30.

Trade smart,

Rick Nartarian, Chief Investment Officer
The American Investor Daily