Chip stocks crushed in worst day in 6 years — bargain hunt the AI infrastructure
Thesis
The entire chip sector was dragged down by a scary jobs report and general market panic, but the fundamental demand for AI computer chips hasn't changed. Big Tech is committing hundreds of billions of dollars to build AI data centers, and they absolutely need companies like Marvell and Micron to supply the hardware. Because these stocks dropped so sharply for reasons unrelated to their actual business prospects, they present a compelling bargain. Look for a rebound once the panic selling exhausts itself.
Strategy approach
Build a dip-buying strategy for semiconductor stocks (MRVL, MU, NVDA) on the daily timeframe. Enter long when the stock's RSI(14) falls below 30 (oversold). Add a secondary entry condition requiring the price to close above the previous day's high (bullish engulfing or reversal candle). Exit when RSI(14) crosses above 70, or use an 8% trailing stop.