By Doug Busch

The last three months have seen investors clearly sour on technology stocks and move into value-oriented plays. The three best-performing S&P sectors, and the only ones to have delivered double digit gains over that time frame, are energy, materials, and healthcare, reflected in their ETF proxies Energy Select Sector SPDR ETF, Materials Select Sector SPDR ETF, and Health Care Select Sector SPDR ETF.

One notable exception to this tech exodus is the robust action in the semiconductor segment. Several semi stocks have posted strong gains recently, particularly memory-related plays such as SanDisk and Micron. SanDisk is up more than 70% so far this year (not a typo), suggesting the easy money has likely been made. Elsewhere Intel's rally of 30% in just two weeks further reinforces the case for patience rather than pursuit.

As a technician, I am not inclined to chase hot names after big rallies. I will instead remain patient and look to pick my spots, fully acknowledging that some levels may never be reached. Technical analysis provides the tools to recognize when it might be worth buying a stock on a pullback.

Round number theory is not only coming into play with the Dow Jones Industrial Average at 50,000 and the S&P 500 near 7000, but also with the VanEck Semiconductor ETF at $400. The ETF has printed some dubious candles over the past three sessions. Yesterday saw two spinning tops followed by a bearish filled in black candle, all after a powerful 137% rally off the April lows. Against that backdrop, let's examine three stocks on my wish list to target on pullbacks.

Advanced Micro Devices has delivered a standout performance over the past year, gaining 92%. However, signs of fatigue may be emerging. Over the past three months, the stock is down 3% while the VanEck Semiconductor ETF has gained 15%. That divergence was especially telling during the week ending Nov. 21, when the stock plunged 17% as the SMH ETF declined just 5.5%. This period of underperformance raised caution flags.

AMD has worked to stabilize since that November drawdown, and deserves credit for successfully bouncing off the very round $200 level three times during that period. Heading into today, shares were up 12% on the week. However, yesterday's session produced a rare doji candle. A similar doji on Oct. 29 at the stock's all-time high preceded a sharp $70 decline. A repeat scenario is possible this quarter, making a pullback toward the $180 to $185 range -- corresponding to a 20% correction from current levels -- attractive as a potential entry point. Such a move would help form the right side of a double bottom pattern near a gap fill from Oct. 3. It would also allow the price to catch up with a rising, 200-day simple moving average, setting the stage for a healthier next leg higher.

Advanced Micro Devices was trading around $232 Friday.

Marvell Technology has delivered a notably weak one-year performance, down 30%. The stock now trades about 37% below its most recent 52-week high set late last January. Relative strength remains soft this week, with shares down more than 3% heading into today's trading versus a 2% gain for the SMH ETF benchmark. This underperformance follows a 7% decline last week for Marvell.

There could be some reason for optimism here. Marvell is now trading into a bullish morning star that was completed on Nov. 24, since which it has gained 8%. A potential double-bottom pattern is forming here. This move started with a bearish island reversal and 7% gap down on Dec. 8. Jus days earlier, on Dec. 3, the stock saw an earnings-related gap up of 8%. Notice round number theory was at play too at $100, with a doji candle and consecutive spinning tops between Dec. 3 and Dec. 5. I think an entry near $78 makes sense, which could see the stock trade into the now upward sloping 200 day simple moving average. Look for the stock to move toward the very round $100 number in the second quarter, representing a 22% gain from current prices. Remain bullish above $73.

Marvell Technology was trading around $81.50 Friday.

Texas Instruments has lagged other semis, down roughly 4% over the past year. However, the stock deserves credit for starting 2026 on a strong note, advancing about 9% so far. Momentum has improved meaningfully, with shares higher in six of the past eight weeks. This includes three weeks of powerful gains in the 5--7% range, even in the face of a recent Goldman Sachs downgrade.

The stock's weakness over the past year is evident in its soft relative performance versus the SMH benchmark. But the technical backdrop has improved, with all three key moving averages now sloping higher. Shares broke out above a bullish inverse head and shoulders pattern on Jan. 6, gaining 8.4% and in the process reclaiming the 200-day simple moving average for the first time since early September. Importantly, the base was marked by constructive bottoming signals, including a bullish piercing line and engulfing pattern on Nov. 18 and Nov. 21. Following yesterday's bearish dark cloud cover candle, a pullback toward $183 would offer an attractive entry, with upside potential toward $217 by mid 2026. This represents roughly 16% upside from current levels, while the bullish thesis remains intact above $178.

Texas Instruments was trading around $192 Friday.

Waiting for the market to come to you, rather than forcing a trade, is often the edge in this fast moving sector.

Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 16, 2026 12:05 ET (17:05 GMT)

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