[Charts] Chips, Hacks, and Nothing but Bullish Vibes

Dear Wall Street Daily Reader,

If you’re new to the Trend Trader Daily Nation, here’s the rundown…

Each week, I embrace the adage that “a picture is worth a thousand words,” and hand-select some compelling graphics to put important investment news or insights into perspective.

All it takes is a quick glance and you’ll be up to speed. And hopefully poised to profit.

This week, I’m dishing on chips, cybersecurity, and a rare warning to be cautious when everybody is so bullish.

Call It a Comeback!

Straight-up A-Team, Hannibal Lecter style: “I love it when a plan comes together!”

Ever since the early days of the pandemic, I’ve been telling you to buy every dip in chip stocks.

Why? Because every tech trend for the foreseeable future requires more chips. Therefore, it was 99.99% guaranteed chip demand would rebound. ASAP!

And now we have final definitive proof.

Semiconductor Growth

Per IC Insights, total chip shipments are expected to rise 13% in 2021 to a new record of 1.1353 trillion units.

Forget this being the third time in history that chip demand topped the “Big T” unit mark.

What’s most notable is the acceleration in growth. Last year, chip shipments only rose 3%. So — you guessed it — keep buying every dip in chip stocks.

And yes, Atomera Inc. (ATOM) remains my favorite way to profit from this trend.

The Best Defense Against Cyber Crimes

Last year, I dubbed Cybersecurity my “Trend Trade of the Decade.”

While countless companies work diligently to stay ahead of the latest hacking schemes, this chart reveals a scary reality.

Most common types of cyber crime

We’re our own worst enemies — and therefore, our own best protectors.

That’s right. As you can see, the majority of cybercrimes aren’t focused on big networks; they’re focused on people like us. According to FBI stats, the most common form of cybercrime involves “phishing, vishing, and smishing” attacks.

Come again, you say?

If you don’t know what those attacks are, it means you’re all the more vulnerable. You can get up to speed on the differences here.

But here’s the key: all three involve a simple email, voice, or text message that prompts you to voluntarily give up your personal information.

As they say, you can’t fix stupid. Not even with software from top cybersecurity firms.

So don’t be stupid! Keep your personal information private… and keep buying cybersecurity stocks.

Sentiment Matters

For decades, academics insisted nothing but fundamentals and financials mattered in the market. They completely ignored investor psychology.

But an awakening occurred, and the efficient-market hypothesis got dethroned, as the field of behavioral finance emerged.

Why bring any of this up? Because sentiment and psychology matter!

Extreme measures of sentiment typically foreshadow turning points.

Newsflash: Enthusiasm is running rampant. Take a look at the latest AAII bullish sentiment reading.

Bullish Sentiment

As Bespoke Investment Group reports, “Bullish sentiment surged by the most since November to 56.90%. The last time this reading was higher was way back in early 2018.”

Always a contrarian at heart, whenever I see enthusiasm this overstretched, I keep some cash handy. Why? Because a pullback — and by that I mean a healthy one, not a bone-crushing one — is typically around the corner.

So keep your friends close, your enemies closer… and your cash closet! We could be in store for another great dip-buying opportunity like we saw for chip stocks throughout the last year.

If one materializes, rest assured I’ll let you know the best investments to buy.

Ahead of the tape,

Lou Basenese

Lou Basenese
Editor and Founder, Trend Trader Daily

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Louis Basenese

Louis Basenese is a professional investor, and one of the country’s leading technology analysts.

He’s spent the past 20 years analyzing emerging technologies, and developing a proven methodology to consistently profit from them.

Lou began his investment career at Morgan Stanley, where he was eventually tasked with directing over $1.5 billion in capital.

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