Semiconductors have been gaining momentum in recent months and Intel’s positive guidance Friday may just be enough to kickstart the sector into a nice sustained rally. Clicking on the chart at the left… you can see that the Semiconductor Index is showing signs of strength by surging above two major resistance areas, the downward trend line in green and the 50 day moving average. Studying areas of support and resistance allows you to gauge the strength of a stock or in this case, an entire sector. Surging above resistance and finding support at the previous resistance is a sign of strength (notice the rise above resistance of the downward trend line and the subsequent support there before eventually rising above the next major resistance level of the 50 day moving average). All signs of strength.
Semiconductor stocks to keep an eye on would include VIRL, RMBS, FLSH, ATMI and KLAC.
Filed under Industry Spotlight by Tate Dwinnell
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