Skip to main content

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

Comments

Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Durable Goods report for Sept just so-so but Computer segment is on fire

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments -- 

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:


Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:


Results here were actually quite good and, to make things even better, the previous month was revised upward.

N…

Alert HQ has moved!

End of an era!

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, TradingStockAlerts.com and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at Trade-Radar.com

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Click …