The MANIA Stocks Are Tanking. Here's How to Take Advantage of Semiconductor Volatility.

My article from June 28 outlining the M-A-N-I-A trade was either a warning signal to heed or a case of that broken clock being right twice a day.

In this case, MANIA refers to these uber-popular stocks, all of which are among the biggest holdings of the iShares Semiconductor ETF (SOXX), which made quite a move earlier this year:

• Micron (MU)  
• Advanced Micro Devices (AMD) 
• Nvidia (NVDA)  
• Intel (INTC)
• Broadcom (AVGO) 

Now, I don’t make up narratives. I just look at a lot of charts using the great, time-saving, and effective way that Barchart presents them. 

Here is how I closed that article less than three weeks ago:

From a purely objective charting perspective, the momentum indicators have entered a dangerous exhaustion window. The semiconductor sector has effectively carried the entire burden of keeping the cap-weighted averages out of the red this year. But when an index relies on a single, concentrated theme to sustain its entire performance, it is an accident waiting to happen. Make sure you have insurance.  

How Are the MANIA Stocks Doing During July?

What's the performance been like for these stocks in July? In a word, scattered. More recently, they are each having a mini-meltdown. Since that June 28 article published, and not including Thursday’s drubbing, MU and INTC had each given back 20%. But NVDA resumed its market leadership position as part of the Magnificent 7, bouncing 10%. AVGO rallied 8%, and AMD gyrated in both directions. It gained 10% in just two days, gave back that rally and others, and through Wednesday’s close was up 1.5% since June 28. “Nothing to see here, right?” Wrong.

There’s a lot to see. SOXX, the exchange-traded fund (ETF) that has these five stocks at the top of its capitalization-weighted semiconductor index, allocates about 40% of its 30-stock portfolio to this handful of names. So the math is like this: 40% to five stocks (8% each on average) and 60% to 25 other stocks (2.4% each). MANIA has a lot to say about how the market’s hot industry in 2026 is faring.

While each esteemed member of the MANIA stock club has its own story, the charts are different degrees of perilous in my view. SOXX, shown above, is naturally a blend of these five and the other 25 smaller names as well. What I see would concern me — if I had not been aggressively shorting these, albeit with small amounts of capital, since shortly after that article was published. In other words, it should be a big yellow flag to those thinking that every bounce here will be bought. That might occur, but the odds are fading.

That’s how I translate a PPO in SOXX that is just now repealing its entire major move from earlier this year. Just below the zero mark, if it is going to rally, it had better do it soon. Below zero is where “rallies go to die.” 

Add in the 20-day moving average pointed straight down, but still highly elevated, and a 50-day moving average that is just starting to reverse lower, and you have a perfect storm setup for what has been a remarkable, historic trade. And, one that was similar in the year 2000, before it crashed.

Here’s a quick update on each of the five stocks.

Micron Technology (MU)

Micron is the poster child for how quickly a semiconductor cycle can turn from an inventory bottleneck into a demand scare. Through the first half of the year, MU was an absolute rockstar, riding a wave of pricing power because its high bandwidth memory (HBM) chips were completely sold out through the end of 2026.

But the morning after IBM's (IBM) warning, reality set in. Despite having its inventory locked up, MU shares tumbled more than 7% in a single session. Short interest in Micron has quietly piled up to a three-year high. The market is forward-looking; Wall Street is realizing that if corporate clients pull back on overall datacenter buildouts to preserve cash, the projected capacity additions coming online in 2027 will arrive right into a massive supply glut.

Advanced Micro Devices (AMD)

AMD has been caught in a brutal technical crosscurrent. Billed as the only viable secular competitor to NVDA’s data center monopoly, the stock has repeatedly broken its short-term moving averages. 

Nvidia (NVDA)

The undisputed king of the cycle is showing late-stage cyclical weakness-type behavior. It has managed to occasionally tick green during broad semiconductor washouts; the underlying price action is exhausting itself. If downstream corporate revenues don't match the trillions spent on graphics processors, NVDA will face the mother of all air pockets.

Intel (INTC)

If you want to see what absolute capital punishment looks like in the tech sector, look here. While its MANIA peers spent the last year printing historic highs, INTC was really a “story stock,” given the U.S. government’s investment in it. It recently plunged another 11% in a single afternoon as global smartphone and legacy PC demand projections continued to soften.

Broadcom (AVGO)

This stock is really where the entire chip sector's July anxiety officially began. Despite printing a headfaking "Apple (AAPL) win" press release early in the month, AVGO blew a massive hole in the bullish thesis during its earnings cycle.

Takeaways

I do not think there is a middle ground here. These stocks will either be dip-buying heroes again, or the crease in their charts will turn into a crash. That’s less due to fundamentals, and more to do with liquidity, and leveraged players being punished for being in over their skis.

Fortunately, there’s the Direxion Daily Semiconductor Bear 3x Shares (SOXS), which is a 3x inverse ETF targeting the SOXX ETF, which tracks the Philadelphia Semiconductor Index ($SOX). At a time of sky-high volatility in this industry, put options are essentially off the table for me. As is the case with my use of other 2x and 3x bull and bear ETFs, I maintain very small position sizes, stay ultra-nimble, take profits aggressively, and realize that this market is anything but normal. 

Managing risk has never been more important. But that shouldn’t prevent us from taking advantage of the volatility to make it our friend, not our enemy.

Rob Isbitts is a semi-retired CIO, former fiduciary investment advisor, and Barchart columnist. Check out his other work at ETFYourself.com (featuring the Fresh Charts weekly trading post) and ROAR.PiTrade.com, helping investors to better manage their own portfolios.