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A New Development Takes Shape
July 24, 2007

Some people make New Year’s resolutions…this year I made New Year’s predictions.  Back in January, I told my Trending123 subscribers that 2007 going into 2008 would be the “Year of the Chip.”

You see, chips run in four-year cycles.  And looking back, we’ve had major cycles in chips in 1999 and 2003.  So for all you mathletes out there: what’s 2003 plus 4?

In fact, in 2003—the last time we saw out-performance in the chips—the SMH ran up one hundred percent.  And it’s under-performed the QQQs ever since then.  If the technology stocks can overtake the QQQs, we will have a run-up so huge that chips will undoubtedly become the best-performing sector.

Now, oddly enough, for the first time in a long time, we are now seeing full bullish trend reversals in the SMH on the daily, weekly AND monthly!  But if you are sitting there thinking that this is somehow connected to the overall market and its stellar performance…think again!  Forget NASDAQ, the S&P500 and the DOW.  This has everything to do with this sector and this sector only.

It’s already a proven fact that the NASDAQ can move up hundreds and hundreds of points without the chips.  It’s no longer a requirement, like it has been in the past, to have a rally in the NASDAQ and have chips not perform.  Chips have actually been performing counter-trend the NASDAQ for the past couple years, more so than ever.  One has nothing to do with other.

So, we have waited a year and a half for the SMH to be in a full bullish trend reversal.  And if you know anything about the 1-2-3 bullish trend reversal you know that you always get a counter-trend pullback.  They’re always vicious, fast and fierce…

If chip stocks are the game, you know we’re playing ‘em!  I’m currently recommending seven of them to my Trending123 subscribers—6 of which have just joined the portfolio!  Click here to get ahead of the game and learn the names of all seven of them. Or take this one right now and contemplate the rest:

NVE Corporation (NVEC)

NVE Corporation engages in the development and sale of devices using spintronics, a nanotechnology, which utilizes electron spin rather than electron charge to acquire, store, and transmit information.  It sells its products through distributors primarily in the United States, Europe, and Asia.  The company was founded in 1982 and is headquartered in Eden Prairie, Minnesota.

Buy under $35. Target is $80.

The market environment right now is treacherous.  Yeah, it doesn’t appear so but as I have told you time and time again, you’ve gotta look under that hood to see what is really going on.  Banks, homebuilders, real estate…all of these have just been crashing down!

1-2-3 Bullish Trend Reversal

What do I mean when I say we’ve been waiting to see a bullish trend reversal in the SMH?  Well, it’s easy to see trends once they’re over, but the only way you can profit is to identify the direction of a trend before it has run its course.  That’s why I look for what I call 1-2-3 Bullish Trend Reversals.

As the name implies, a bullish trend reversal signals the beginning of an uptrend.  The rule of thumb is to go long on a bullish uptrend.  But how can you tell when it happens?  Actually, it’s simple.  You know you’re looking at a 1-2-3 Bullish Trend Reversal when:

  1. The Aroon(up) line is moving higher and crosses the Aroon(down) line moving lower.
  2. The Williams %R rises above the -50% line.
  3. The PPO rises above the zero line—or in other words, turns positive.

All three of these have occurred in the chart for the SMH, which can only be the start of something good!  If you aren’t familiar with these indicators or if you just need a refresher, you can read more about the Aroon, the Williams%R and the PPO here.  Otherwise, click here to start trading 1-2-3 Bullish Trend Reversals now.

And it’s for this reason that I love counter-trend and sector trading so much.  Because it doesn’t matter what is happening in the market for these sectors and these stocks to succeed.

Please stay tuned to Trending123 to be a part of our future success!


John Lansing

P.S. It’s hard to convince someone to be a part of future successes if you can’t make any guarantees.  But I can come close…I can tell you that we’ve had some incredible successes in the past several years at Trending123.  Just take a gander at these: Hansen Natural Corp—up 23.95% in 4 days, Berry Petroleum—up 27.20% in 6 weeks and Zoll Medical—up 109.91% in 4 months.  Stay with us for our next round of profits!

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