Starting New Position as Low-Priced Semiconductor Play Turns Heads

Despite the news about the closing of the Strait of Hormuz and difficulties in the Iran-U.S. negotiations, the market opened with only minor losses. Many market players were hoping to buy a dip and they provided some immediate support.

Fog of War Returns

The early strength is reversing on news that Vice President Vance is not anticipated to be in Islamabad for negotiations until Wednesday. The Iranians have indicated that they may not even participate. It is unclear how much agreement there may be behind the scenes.

With the indexes and many stocks extended, it isn't surprising to see some profit-taking kick in. The pullback isn't substantial enough to entice big dip buyers and there doesn't appear to be the likelihood of much good news for a few days.

The Overbought Debate

Most of the current market discussion is about how the indexes have made a record move and are now grossly overbought. That is a legitimate concern, but what it misses is the good action in many individual stocks. I see many names that will provide great technical setups with some pullbacks and consolidation.

Names I'm Watching

A few names I'm looking to add to are Hims & Hers Health  (HIMS) , TeraWulf  (WULF) , Ocular Therapeutix  (OCUL)  and Xeris Biopharma  (XERS) .

A New Position in Atomera

A new name I am starting for client accounts is Atomera Incorporated (ATOM), a low-priced semiconductor play. This small semiconductor company does not make chips itself. It sells a technology called Mears Silicon Technology (MST) to the companies that do. 

MST is a technology that produces a microscopic layer of reengineered silicon that makes the transistors inside a chip run better and use less power. Atomera licenses the technology to chipmakers, who build it into their own manufacturing process.

A Boom and a Long Hangover

ATOM has had several surges over the years as the market speculated about the adoption of its technology. During the post-pandemic market surge, the stock ran from about $2.50 to nearly $50 in less than a year. Over the next four years it gave back every penny of those gains and wound up right back where it started. 

The technology always sounded promising but the issue is that the semiconductor industry moves slowly when it comes to adopting anything new. Atomera has been waiting a long time for commercial traction and many investors have given up on it.

2 Milestones Got Traders' Attention

Things changed on February 12 when Atomera reported its fourth quarter and full-year 2025 results. Two items in the release caught the market's eye.

First, the company showed it could manufacture MST on what the industry calls "Gate-All-Around" transistors. This is the next generation of transistor design that the leading chipmakers (Taiwan Semiconductor  (TSM) , Samsung, Intel  (INTC) ) are moving to as they push beyond the limits of today's technology. Showing that MST works on this architecture opens a much bigger door.

Second, a top-20 semiconductor company began running production wafers using MST on gallium nitride. Gallium nitride is a material that is gaining importance in power electronics and defense applications. Having a major customer move MST out of the lab and into production is the kind of signal the market has been anticipating for years and it caused a jump of over 60% on the news.

The Chart Setup

After the pop, ATOM spent the rest of February and March digesting those gains. It then found support at a key long-term moving average as semiconductor stocks caught a bid, and has been working its way back up toward resistance around $5.50. That level has capped the stock for several weeks now. The longer it consolidates just below that price, the more energy it tends to build for a potential breakout.

My ATOM Game Plan

I am not chasing early strength on Monday morning. My approach is to watch how ATOM behaves around the $5.50 level and trade the stock aggressively as the chart develops. 

A pullback that holds the recent lows would set up a cleaner entry for those who are so inclined. I already put ATOM into my clients' accounts and will be watching to build that position.

There are many other interesting stocks out there if you do some digging. Don't let all the talk about the overbought indexes deter you from finding good opportunities.

Related: How Much Upside Can Remain for a Market That's Afraid to Sell?

At the time of publication, Rev Shark was long ATOM, HIMS, OCUL, and XERS.