The chip sector has had a massive rally so far this year. MarketSmith's list of breakouts in the past few weeks finds six chip stocks trading above buy points — more than any other sector.
In a pullback Monday, two leading chip stocks remained in buy zones.
Applied Materials broke out of a cup base with a buy point of 116.19 in strong volume last week. Shares are in a buy zone to 121.99.
The chip-equipment maker has seen slower growth than most other chip companies. Sales grew 5% to 12% the past three quarters, while earnings grew 2% to 13%. Yet, Applied Materials still has a solid Composite Rating of 93.
What's outstanding about the chip stock is fund holdings. Mutual funds hold 51% of the stock. The chip stock's Accumulation/Distribution Rating of A- also indicates strong interest from institutional investors. The Santa Clara, Calif.- based company provides chip gear and software to the semiconductor industry.
Chip Stock Lattice In Buy Zone
Lattice Semiconductor is also in a buy zone, this one from a buy point of 76.57 in a cup-with-handle base. Shares broke out in strong volume last week and have pulled back into the buy zone.
Sales grew 31% to $172.5 million in the third quarter while earnings per share of 48 cents were up 71%. That's the best EPS gain of the six chip-stock breakouts reported most recently.
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Microchip, Onsemi and Cirrus Logic also are extended from breakouts that occurred within the last few weeks.
Analog Devices is trying to break out of a cup base with a 180.05 buy point.
The transportation and building sectors also have six recent breakouts in MarketSmith's screen, although those sectors are more diverse in their makeup.
Be sure to follow VRamakrishnan on Twitter at @IBD_VRamakrishnan for more on growth stocks.
