SOX Semiconductors Daily Chart Overbot Negative Divergence

Here's a look at the semiconductors, SOX, socks. Many of the readership here have been watching the semi's closely.  Note the W pattern bottom; the move from 350 to 390 is a difference of 40 points so a target of 430 is in play, which also happens to be a gap fill.  This target does not have to be met right away, price may meander thru 370-410 for the next couple months before the chart may continue higher.  The interesting aspect to focus on now is the negative divergence shown by the short red lines. The higher high in price today comes without any enthusiasm in the indicators, in fact, they would rather see price move lower.  So keep an eye on the negative divergence moving forward.

A spank down would be expected now and a back kiss of the 200-day MA was not performed as yet, after the early August breakout, so the low 390's would serve as a target.  The MACD line is squeezing out a higher high so price will likely want to come back up to this current level after a pull back occurs. As would be expected, looking at the SOXS and SSG charts, which are inverse ETF's that move opposite the action in the SOX, they both show positive divergence in place and should experience a bounce.  This trade would require attention and nimbleness. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision