Semiconductors

[flea]

The semis had a pretty awful day today, but as you can see from the chart they are approaching a key technical and psychological level at 500. The low today was 502 and it closed just above that at 504. Given the speed of the recent fall we could hope for a bounce if only for the fact that they look oversold, yet it will take a good deal of bravery to stand in front of this express train.
If support fails, it looks an very long way downto the next support at 430
It's time to place your bets.

 

[Naz]

Actualy flea i'm glad you posted this because i was looking at the chart myself and wondering about looking for some semi's to keep an eye on.

 

[flea]

Semis I like to play

The two I like to play in this index are KLAC and NVLS.

The thing that concerns me most, is that traders were happy to sell these down on large volume so close to support, it doesn't bode well for today.

Whatever happens it should be an interesting day

 

[Naz]

Just to let $sox watchers know what happened on Friday.The support level was broken as you can see.Many people believe that if a chart runs hits consolidation then breaks out of it on the other side then it will travel the same distance out of the consolidation.this implies the $sox could hit about 420.

 

[flea]

Update

If you'd gone down to the woods today you'd have witnessed carnage, not least because of the Semi's.

There's nothing more powerfull than a failed breakout, especially when a level has been so closely watched as 500 was in the Semi-conductor index. The chart shows a huge buying surge as buyers pile in causing bears to scramble and cover positions as stops were taken out.

 

[ChartMan]

How sweet to see a Bulls revenge. Bet the whole market looked like this today...long may it last.

 

[flea]

Update

We saw a pullback today as profit takers took control. The key will be the 500 level. For the rally to be sustained I think we need to see this hold, my guess is it wil,l but sentiment can spin on a penny these days and we have to remain vigilant.

 

[flea]

Update

Dissapointingly the Semi's couldnt hold on to 500 and fell back with the rest of the market today but before the bulls wave a white flag, I'll hold out some hope for Monday in that Fridays move filled the gap created on Wednesday which I'll illustrate in the next post with a chart of KLAC

 

[flea]

KLAC

The following is a Chart of KLA - TENCOR which is a constituent of SOX and illustrates how most of the Semi's have moved over the last 3 days.

Stocks in the Nasadq have a tendency to gap and then fill the gaps over the next few sessions. So the question is: Now the gap has been filled in most of these stocks, will the recovery resume or will the downturn resume?

This is the reason that I'm giving the failure at 500 the benefit of the doubt, but at the same time I'd be nervous as a holder going into Monday's session

 

[Riz]

One gap down with follow through and we'll have another island reversal, hope not, fed up with them, depressing lol

Riz

 

[flea]

Your right Riz, that would be depressing. I'm hoping that the increase in volume over the last few days is a sign of accumulation and the slight decrease on Friday means that the selling pressure wasn't too great.
Although I'm happy to go short as well as long, I think a few days of rising prices would lift the spirits a touch

 

[Naz]

AMAT's earnings are out after the close on tuesday.That may well cause some interest.
With DELL's earnings out after the close on thurs.

 

[flea]

Update

It turned out that the break of 500 should have been treated with caution, once the gaps were filled on the individual stocks they've exploded upwards.

On top of todays move we can expect a strong open in the Semis tomorrow after Applied Material beat estimates by a penny after hours. As I write the stock is trading up an additional $1.40 after hours at $28.10 , they closed up a dollar in regular trading.

Just a word of caution the index is now approaching its 50 moving average at 565 which may slow down progress to the upside.

 

[flea]

Update

Is today's Doji the end of the move?

The Semis sold off at the opening today, only to put in a teriffic rally where the index at 560 flirted with the 50 moving average at 565 and then sold off fast in the afternooon; to finish just about where it had started. Even if this is not the end of the rally it could mean we pause for breath for a few days.

As ever, only time will tell

 

[flea]

Thought I'd update the Semi's story.

The index has pulled back along with rest of the market, with market sentiment strongly against these stocks in the last few days. Today sees a hammer or dragonfly doji signifying the possibility of a short term bottom at least. Individually most of the component stocks have similar reversal candles, many of which were made on fairly robust volume.

 

[madasafish]

I know funnymentals are out of place on a TA bb, but both Intel and AMD have cut CPU prices - for PCs- by 30% early June.

Will do nothing for profits and I understand demand is poor.

Further downside would be inevitable - eventually... about 50% I thought....

Mike

 

[flea]

You may well be right Mike. I don't use fundamentals for my trading, mainly because I feel there are better people out there than me at analysing them.

There semis sold off on Monday albeit on low volume and rallied well yesterday on very good volume. This may well be bear closing, only time will tell

The index currently stands at 466.89. I haven't posted the chart, purely because I don't think it is saying anything interesting today. I'll post another when I see something of interest`