SOX Semiconductors Daily Chart Descending Triangle

SOX showing the collapse out of the blue sideways symmetrical triangle mid-May. A multi-month descending triangle is now in play for semi's with the base line across that 409-413 zone and vertical segment in February from the 411-ish up to the top at 475. Taking the difference, 475-411=64, and subtracting from the projected baseline, 411-64=347, yields the 350-ish target, if price collapses thru the base line. The neon green lines show the boundaries of the descending triangle moving forward, now a range of 409 to 435 is in play and this will become tighter and tighter as the downward-sloping trend line moves toward the base line.

Interestingly, the 20 and 50 MA's are in this 435-437 area providing a confluence for overhead resistance. Watch to see if the 20 MA falls under the 50 MA, now only one buck above, if so, that is bearish. Note the falling black wedge that helped jump price from 420 over the last couple days, but, this jump did NOT occur because of positive divergence, the indicators actually want to see price fall moving forward.

The ADX is in the teens signaling that price is not in a strong trend and this is apparent from the sideways behavior over the last three months. The ADX favors sideways action thru the descending triangle boundaries moving forward, then, should price collapse thru the 409 area, watch to see if the ADX moves up into the 20's and 30's, if so, that would mean that a strong trend is in place and further downside is expected, with the 350-ish descending triangle target firmly in play at that point.

Projection is a move thru the 409-435 range until a test of the 409-413 base line occurs. At that time probably a bounce back up to touch the top of the triangle again at a 420-ish, then back down to collapse thru the base line and target the 350 as the weeks and months roll along. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.