Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Semiconductors Find Some Traction; Russell Breakout Coming Soon?

Published 07/12/2017, 12:04 AM
Updated 07/09/2023, 06:31 AM

Since my last update, there was a significant break and piecemeal recovery across many markets. Not all markets suffered to the same degree and new leadership could emerge.

The Semiconductor Index made steady gains after suffering the largest profit sweep in June. The bearish engulfing pattern remains the dominant pattern but the index managed to return above the 20-day and 50-day MAs (not to mention, the former rising channel). Relative performance improved against the NASDAQ 100 but it hasn't yet challenged the 'bull trap' created after the bearish engulfing pattern.

SOX Daily Chart


Another index making positive inroads is the NASDAQ. It was able to find support at the slower channel line and only recently made it across the 20-day and 50-day MA. The bounce hasn't yet reached a point where it could be considered a decent swing low but the fact the bounce was off a support line is a significant positive. Added to this are the 'buy' signal in On-Balance-Volume and a return above the bullish mid-line for stochastics.

COMPQ Daily Chart


The S&P hasn't reached channel support - a good place to look for a bounce. What it did do was finish with a 'bullish hammer' off the 50-day MA. This index is coming off a 'bull trap' which still looks to be in selling mode (relative performance is poor) but a push above yesterday's high would rank as a minor resistance breakout and be a reason for optimism.

SPX Daily Chart


One significant event which occurred last week was the loss of rising support in the Russell 2000. This move, likely controlled by stop hits, has stabilized and represents a chance for buyers to take a punt on a new breakout coming soon. In this regard, 1400 would look to be key support.

RUT Daily Chart


For today, look for buyers to continue yesterday's good form. With many markets having fallen inside prior trading ranges it puts markets on a more neutral footing. It's probably going to take a couple of weeks for one side to assert dominance, but for those markets closer to resistance a chance for fresh breakouts should be monitored.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.