 Hey everyone, this is Dan with another episode of my ASML videos. I have been trading ASML in the last few months and have earned quite a bit of profit. ASML announced second quarter earnings today. The stock price jumped up and I bought more shares. Why am I so bullish about the stock? Let's get into the details. First of all, let me recap my price forecast in my June 6th video. At the time, I predicted that ASML will be at $720 a share before the end of September 2021. June 6th was a Sunday and before that on Friday, June 4th, the market closing price was $683 and certainly the price has been moving in the direction I predicted. And actually, as of today, July 21st, it closed at $721 and $1 above my target price. So definitely, the price has been moving very nicely. In light of the new developments, will I be setting a new target? I will talk about that in the next few minutes. Let's move on. This is a quick recap of the very, very detailed fundamental analysis I did back on March 28th of 2021. If you are interested, you can refer back to that video. It's in my YouTube channel. The gist of it is that ASML has a monopoly in the EUV lithography market and they have 88% market share in the EUV segment. These equipment, what does semiconductor boundaries need if they want to make the most advanced semiconductor chips? And that's why it's a very profitable business for ASML. Also today, after the earnings announcement, investor business daily said that ASML tops earnings target and provided higher guidance. The most important part was that ASML management now expect sales to grow about 35% in 2021 as opposed to their previous prediction of just 30%. Both numbers are impressive, but revising the growth projection from 30% to 35% certainly made the investors very happy and that's why the price of the stock jumped today. This is the information ASML shared with the investors today in a presentation. I just pulled out one page from it. Here it is, the net sales growth is projected to be about 35%. There's another page where they mentioned the capital return. What the management has been doing is that because they've been making a lot of profit, generating a lot of cash, so they're returning the profit to the investors by way of dividend and share buyback. So over the years, they've been returning these amounts of money back to the investors. As you can see, the capital return has been growing steadily and that's a sign of a very well managed, very successful company. Because of the worldwide semiconductor shortage, quite a few foundries have announced their capital investment plans to catch up. Intel back in April announced that they will be investing $20 billion in foundries and then Taiwan semiconductor followed with the announcement saying that they will be investing $100 billion in the next three years. Then Samsung said that they will be investing $300 billion through 2030 and the European Union also said that they would be investing in new semiconductor foundries, although they haven't announced any specific amount of money that they will be investing. With all these future investments, actually they already started to happen. That's why ASML's revenues has been growing so quickly and actually it's going to go on for the next couple of years at least. This is the historical view of their revenues and net income. And so today I updated this last bar which reflected what the company announced today in the way of revenues and net income. As you can see, the last three or four bars have been substantially taller than the previous bars. So just confirm that the revenues and net income are growing very significantly. This is a chart from the Better Investing website showing the debt to capital ratio of ASML, which is indicated by this black line. It's trending up a little bit, but compared to the overall semiconductor industry, they are actually in very good shape. Of course, the debt to capital ratio, the lower, the better. At this point, I can rattle off another dozen finance ratios from what I learned back in business school after I've taken about 20 accounting courses and finance courses. I can do that just to impress you, but that'll be a disservice because we don't have time to waste on this. We know ASML is a very successful company. They're generating a lot of revenues, a lot of income, and a lot of cash. The important thing is how fast they're going to grow. So look at how fast they have been growing. Again, this is from the Better Investing website. As you can see, since about 2011, their revenue growth have been going at about 20% rate and that's pretty much a slope of this line. And their EPS growth has been at about 16%. Now, notice that the blue line in the industry average, the black line is ASML. The industry has been a lot more bumpy than ASML. As you can see, there's pretty severe dip, but ASML seems to be holding up pretty strong even against bad times. Same with EPS. There was a big dip here for the industry in 2013, but a dip in 2013 was not nearly as strong for ASML. That's another sign of a very well-managed company. As you might remember a few pages ago, we mentioned that the ASML management forecasted that the 2021 sales growth would be 35%. So that means this line will go up like this for 2021. And likewise, the EPS growth will be a lot steeper as well. That's why it's very bullish all around. If you like what you've seen so far, I'd like to suggest that you click the like, subscribe and notification button. That way you'll be notified if I publish more videos in the future and it will also encourage me to make more videos like this. Thank you very much. Let's continue. Let's look at the other analysts opinion and especially what they have changed between June and today. This is the closing price today, 721, my new target. I'll be talking about that in the next few minutes. Yahoo Business, maintain the buy rating. Same high target of 820. The average target has been increased from 747 to 760. I highlighted the new numbers in yellow. Low numbers the same. Luznevalier actually downgraded it from A to B. The main reason is the quantitative rating. And that means the chart for ASML is not being doing as well as a broad market since about a month ago. In fact, the entire semiconductor industry has underperformed compared to the broad market for the last month. But later on we can see that ASML is picking up very nicely in the last few days and there might be a sector rotation coming back to the semiconductor business in the next few weeks. We'll talk about the charts later on. But it seems that Luznevalier is the only analyst who is somewhat negative about ASML during the last month. If you look at tipranks.com, they increase the high rating from 806 to 820. Average went from 752 up to 810. Low target from 700 to 800. Seeing money also increase the targets. And same with the street.com. So it's pretty much bullish all around with the exception of Luznevalier. What is my only evaluation? This is the recap of my evaluation back in June. My prediction was $720 a share based on these calculations. Today I refreshed my calculations. First of all, I downloaded the latest market caps and the trailing and forward P ratios and the PEC ratio from Yahoo Finance. And this line is ASML. The very impressive part is that ASML has a PEC ratio of just 1.5. Of course, the slower the PEC ratio, the better. As you can see, some of the semiconductor companies have PEC ratio of 2, 2.3, even 4.3, 2.6. 1.5 is very conservative. And that's because they have very high earning growth numbers. Then based on the information we talk about, I assume earning growth of 29.8%. And that's very reasonable if their revenues will be growing at 35% as predicted by management. And I believe a 45 P ratio going forward is reasonable because they have currently a P ratio of 56.9. Actually 45 will be fairly conservative. I then apply the trailing 12 month figures for the company. And then using these assumptions, I calculated what the stock will be worth for 2021, 22, and 23. And from these numbers, I decided that I can set a target price of $750 a year by the end of October, 2021. As you can see, 750 is on the low side compared to this range. It is a very conservative number. As the price approaches that number, I will most likely revise my target upward. So please stay tuned, as I publish more videos in the future. Let's look at a chart. This is the one-year chart comparing ASML with the industry semiconductor industry that is as indicated by the SMH ETF. And this candlestick line is ASML. And then the blue line is QQQ, representing the movement of the NASDAQ 100 and the purple line is SPY, representing the movement of the standard and poor 500. ASML has been going up to the tune of 87% in the last year. And the semiconductor industry only went up 57%, very impressive number, but not nearly as good as ASML. And the SMP and QQQ only went up 36%, which is impressive. But again, not as good as ASML. Three-month chart. Here you can see ASML went up by 9.6%. QQQ by 6.2% and SPY 2.6%. SSMH, the entire semiconductor industry on average, went up just about 2.6%. You can see that in the last three months or so, up until a few days ago, the semiconductor industry is underperforming compared to the broad market, as represented by SPY and QQQ. But then it's been recovering in the last three, four days. And the recovery for ASML is even more impressive, especially today, right after the earnings announcement. And that's why I think sector rotation might be favoring the semiconductor industry again in the next couple of weeks. I'll be very watchful and looking for any future developments. Let's look at the daily chart. We can see that since around April of this year, ASML has been trending up very steadily along this channel, rather narrow channel, actually. And then it broke below that as the entire semiconductor industry went down in the last couple of weeks. But as of today, it went above this trend line. So hopefully this recovery will continue. If you look at RSI indicator, we had almost an overboard situation here corresponding to the dip afterwards. And now we're at this point, which is not as high as that. So we might still have some momentum go yet for the next few days. If you look at DMI indicator, we just see a bi-signal from yesterday. And MACD is just about turning bush. Let's look at support and resistance levels. I use a Fibonacci extension diagram and pick this point around May 15th as a minimum point and this point around June 15th as a maximum point. Draw the diagram. For support, the next level down will be at 694, which is the middle of the Bollinger Band, 20-day moving average. And the next level down will be 677, which is a 50-day moving average, the blue dashed line here. And the next level down will be 669, the lower Bollinger Band, the next level down will be 641, a 100-day simple moving average. For resistance, that's when we go to the Fibonacci extension. The next level up will be at 734, which is this line at Fibonacci extension 23%. Next level up will be 750 here, Fibonacci 38%. Next level up, 763, right here, Fibonacci 50%. Of course, there's a next line up at 776, which is Fibonacci extension 62%. What are my strategies? I'll be buying ASML shares during dips, especially when it bounces from a support level or when positive news breaks out. And that's exactly what I bought additional shares today. It already went up for $2 or $3 after I bought my shares today. Of course, I have been holding ASML shares since the beginning of this year, and it's been seeing some pretty nice profit already. As usual, I'll be holding about half my shares for the long-term because I'm bullish about a company which has very, very strong fundamentals and I'll swing trade the out of 50%. And I'll sell the shares when it drops at key resistance level or when adverse news breaks out. That's with about 50% of my shares. The other 50% I'll be holding long-term. And I'll definitely be monitoring current events related to the semiconductor industry and related to ASML. I will tweet my subscribers when I buy or sell ASML shares or when major news breaks out. And that brings to this page my Twitter account, which is DanMarketL. I'd like to encourage you to subscribe to my Twitter account in addition to subscribing to my YouTube video. For example, on July 16th, I tweeted my subscriber that in light of the S&P 500 inclusion of Moderna, which is another stock that I follow, and I make quite a few videos on that as well. You might want to check them out. I said, I am raising my price target for Moderna to $300 a share to be reached by the end of September, 2021, and I just bought more Moderna shares. And actually, it has gone up quite a bit already since I bought it on July 16th. Again, I'd like to encourage you to click the like, subscribe, and notification button. And as usual, I will very, very much welcome your comments, questions, and suggestions. Thank you for watching all the way to here. Let me recap. My new price target for ASML is $750 a share to be reached by the end of October, 2021, and today's closing price is $721. So it's got quite a bit of distance to go up yet. At this point, I'd like to remind you that I'm not a financial advisor. I share my stock trading strategies for educational purpose only. If you want to buy or sell stocks, you should make your own decisions, and you should definitely consult with your financial advisors before you do so. This about wraps up my video for now. I will chat with you again in the next few days. In the meanwhile, I'd like to wish you the very best of luck with your financial investments.