Categories: Momentum Trader Alert HotlinesStock Market News

A Semiconductor Recommendation with Both Momentum and Solid Upside

With the market’s overall momentum ebbing in the past two weeks, the semiconductor sector remains one of the best-performing areas of the U.S. stock market.

Formerly known as Avago Technologies Limited, Broadcom Limited (AVGO) is a designer, developer and supplier of analog and digital semiconductor connectivity solutions. The company provides data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, power generation and alternative energy systems.

Broadcom Limited, founded in 2005, has its headquarters in Singapore. Barclays investment bank reiterated its overweight rating on Broadcom last Friday and raised its price target to $250. That implies 10.6% short-term upside for the stock.

Broadcom Limited (AVGO) versus the S&P 500 over the past three months.

Momentum Trader Alert Analysis

Recommendation

Buy Broadcom Limited (AVGO) at market today, and place your stop at $200.00.

In light of the stock’s sharp move upward last week, I am holding off on recommending options for now.

This week, you should take advantage of the recent pullback in Banco Santander (Brasil) S.A. (BSBR) shares and buy the BSBR June $10 calls (BSBR170616C00010000), which last traded at $0.60 and expire on June 16. Banco Santander has seen favorable earnings estimate revision activity lately, which is often a precursor to an earnings beat.

Portfolio Update

You were stopped out of U.S. Silica Holdings (SLCA) at a loss, as the stock dropped in response to the oil price tumbling below $50 last week. Note that from a fundamental standpoint, SLCA remains one of the largest holdings among various U.S. small-cap strategies.

Sincerely,

Nicholas A. Vardy

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.