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There are times when a company becomes the best-known representative for its sector, for better or worse.
It happened with Nvidia Corp. (NASDAQ: NVDA) shares more than a year ago as any mention of the semiconductor sector was prefaced or followed with talk of Nvidia. For those of you doing this long enough, Intel used to be the face of the semis.
Anyhow, I bring this up because everyone's focus on Nvidia's poor performance has cast a cloud over the rest of the semiconductor sector, a group that is wildly outperforming the rest of the market.
Here's the thing – Nvidia is trading 10% higher for the year, but you would think that it was down 25% the way that analysts and the media talk about the stock.
Truth is that the stock is potentially in one of the most powerful stages of a rally: the "disbelief" stage.
This sweet spot in a stock, sector, or market rally happens when investors are still shell-shocked from the last round of selling and are too nervous to jump on the bull that's already started to run.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Strikepoint Trader and contributes to Money Morning as the Quant Analysis Specialist.