Semiconductor turnaround - is the correction over already?

On Monday I asked if semiconductors were a bargain yet. I proposed that very soon they would be and then the sector would be a clear Buy.

Quite frankly, the sector didn't quite fall as far as I thought it would and now today, in the midst of a tech resurgence based on Cisco's better than expected results, semiconductors appear to running again.

The following chart exhibits several aspects of technical analysis that are worth reviewing:

Here we see the iShares Semiconductor ETF (IGW). There are five points to observe:

1. IGW fell almost to a major support line as drawn by the horizontal magenta line.It has now bounced strongly up from that area.
   
2. The blue line shows the trend line that was solidly broken but the ETF has closed decisively above it today.
3. The horizontal red line is the first resistance line. IGW closed above this level today, also.
4. Williams %R shows the ETF is just now moving out of an over-sold state. It should have room to run.
5. The 200-day moving average never wavered. It is still moving solidly upward.
   

After a 15% drop from its peak, this ETF certainly endured more than a correction. Seeing the range of the Bollinger Bands and the slope of the 200-DMA, however, I'll go out on a limb and predict that IGW should be able to achieve a 12% to 20% gain before the next serious pullback.

So sometimes a sector never quite reaches bargain levels but when it's making a bullish move, perhaps that's not so important.

Disclosure: couldn't resist nibbling on the ProShares Ultra Semiconductor (USD) again today