Trade of the Day: Amkor Technology (AMKR)

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Weeks that contain holidays tend to be positive for stocks, and the U.S. Thanksgiving holiday comes near the start of one of the best six-month stretches for stocks in the year. So the natural tendency is going to be for shares to rise unless there is a very compelling reason for them to back off.

The Nasdaq outperformed the S&P 500 and the Dow on Monday, but other than a positive surprise from German Ifo Business Climate Index report there were no new, specific catalysts for the session. There was some modest follow-through from Friday’s comments by European Central Bank chief Mario Draghi and the surprise rate cut by the People’s Bank of China, but in both cases the initial enthusiasm has given way to a ho-hum attitude by investors who have seen these types of moves so often they are losing shock value.

By this time next week, once everyone in the United States is back from their Thanksgiving feasts, there will be less than a month to go in the year. While people are typically distracted by office parties, their fantasy football teams’ stretch drives and travel plans, this is very often a great time of year for equities.

According to Bespoke Investment Group analysts, over the past 10 years the S&P 500 has risen by an average of 0.63% from Nov. 24 to Dec. 8, with positive returns 80% of the time. These returns include a recent four year winning streak. In terms of sector returns, the upcoming two-week period has been positive for all sectors.

Trade of the Day: Amkor Technology, Inc. (AMKR)

Half of all sectors have seen median gains of more than 1%, led higher by Telecom Services (2.27%), Materials (2.08%), and Technology (1.81%). On the downside, Consumer Discretionary is the only sector (0.55%) with a median return that has trailed the S&P 500. Even though its median return is the weakest, though, the Consumer Discretionary sector has been more consistent to the upside than any other sector, and has seen positive returns for eight straight years.

History is not destiny, but it always helps when you have some kind of tailwind. There will be a time in coming months when the wind will not tend to be in investors’ sails — but when it is, like the present, you should be more willing to take action. Today’s trade is in one of the sectors noted in the Bespoke data as tending to do well this time of year: Technology.

Trade of the Day: Amkor Technology, Inc. (AMKR)Amkor Technology, Inc. (AMKR) is a $1.6 billion maker of semiconductor manufacturing equipment that my Trader’s Advantage subscribers have traded many times before. Our intrinsic value model suggests it is worth at least $22, which means it has 3x potential upside. When this stock gets rolling, it’s unstoppable for days and weeks at a time. It’s rising up from oversold now along with the rest of its group.

AMKR shares were up 0.15% on Monday, essentially flat. This is a cheap stock in a thriving industry, so I expect it to meet my goal. Buy AMKR at $6.90 limit, good till canceled, for target $7.60. Set a protective stop at $6.40 limit, good after 11:00 a.m. ET only.

Jon Markman operates the investment firm Markman Capital Insights. He also offers a daily trading advisory service, Trader’s Advantage, and CounterPoint Options, a service that helps individual traders make steady, consistent profits with volatility-related instruments.


Article printed from InvestorPlace Media, https://investorplace.com/2014/11/trade-day-amkor-technology-amkr/.

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