Wednesday, September 18, 2013

SOX Semiconductors Weekly and Daily Charts Overbot Rising Wedge Negative Divergence Price Extension Stretched

Semi's are a key barometer of economic health. The SOX and SMH are important indexes to monitor at all times to gauge overall broad market direction.  Semi's recover strongly off the August low where the lower standard deviation band was violated on the daily chart. This led to a move to the middle BB and now a move that pierced the upper standard deviation band. Therefore, a move back to the midle BB, at a minimum, would be expected. This is the same as the 20-day MA at 472.69 and rising. The daily chart shows overbot stochastics, a rising wedge, and negative divergence, sans the MACD line, so a topping out of price at the current levels and roll over is anticipated moving forward.

The weekly chart shows the sideways symmetrical triangle break out to begin the year. This target sht 500-530 zone. The bull flag this year targets 500. The purple dots show the price extensions above the 20 MA above the 50 above the 200 which requires a reversion to the mean as always occurs. We watched the July top form with the rising wedge and negative divergence and the smack down occurred. The MACD line remained long and strong in July wanting to see another price high after the spank down. Price has now come up to satisfy the MACD which is now negatively diverged. Projection is for semi's to top out in the days ahead. It may take a week or two due to the recent momo. Note the doji candlestick printing for the action thus far this week. Keystone bot SSG, a double X inverse ETF that moves up if semi's move down, yesterday, opening a new long position. Price should reverse from anywhere inside the red circle. 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.

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