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