Danielle Shay, director of options at Simpler Trading, is looking for opportunities in the semiconductor space amid the recent market sell-off.
"I like to focus on adding strong semiconductor companies on pullbacks for long-term investments," Shay said Saturday during Benzinga's "Boot Camp."
Semiconductor stocks tend to experience increased volatility during general market corrections, Shay noted.
She told Benzinga that she averages into the VanEck Semiconductor ETF (NASDAQ:SMH) over longer periods of time. When the ETF pulls back to key support levels around its 50- and 200-day moving averages, it's usually a good time to add, Shay said.
"When you can get it all the way back at the 200, that's typically a great place to get in," she said. "However ... the market is getting pretty dicey right about now and if this breaks then we could see even more downside."
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The markets are trading lower Monday, continuing to sell-off as concerns over Fed policy tightening weigh on stocks.
Shay noted that she typically looks for a correction in the 10% to 20% range before jumping in. She uses a number of technical indicators to determine entry levels.
"Right now, my primary consideration is just what the overall indexes are doing and with the Nasdaq breaking through a lot of key areas of support ... I really haven't been picking up anything just yet."
Check out more trade ideas from Benzinga's Boot Camp here:
SMH Price Action: The VanEck Semiconductor ETF has traded as low as $216.14 and as high as $318.82 over a 52-week period.
It was down 1.37% at $267.96 at the time of publication.
