2 Chip Stocks Suffering Amid China Crackdown

The Biden administration will reportedly tighten trade restrictions on China

Investors are rotating out of tech this morning, particularly the semiconductor sector, after reports that the Biden administration will tighten trade restrictions on the chip industry due to China concerns. In addition to Nvidia (NVDA), Micron Technology Inc (NASDAQ:MU) and Advanced Micro Devices, Inc. (NASDAQ:AMD) are also feeling the burn today.

MU is down 3.8% to trade at $122.62 at last glance, after yesterday breaching support at the $130 region amid overhead pressure from the 20-day moving average. Shares have taken a big step back from their June 18, record high of $157.53, but still boast a 49.4% year-to-date lead.

Now looks like a good time to speculate on Micron Technology stock’s next moves. This is per the equity’s Schaeffer’s Volatility Index (SVI) of 43% that ranks higher than just 11% of annual readings, meaning premium is affordable amid low volatility expectations. 

AMD isn’t faring much better, last seen down 6.2% to trade at $166.56 as it paces for its fifth-straight daily loss. The security’s latest rally to its highest level since March ultimately fell short of the $190 level, though the 20-day moving average is ready to contain today’s pullback. Shares are still up 14% in 2024, however.

Options bears are chiming in on AMD, with 81,000 puts exchanged so far, or double the intraday average volume. Most active is the July 160 put, followed by the 150 put in that series.

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