SOX Semiconductors Weekly Chart Sideways Symmetrical Triangle

We looked at this chart recently as price tapped on the upper rail. Price is now moving lower to the test the bottom rail.  The tech and semiconductor sectors are struggling this week. All the bad news with AAPL recently including today's news that actual production of Apple products will likely miss estimates forces chip manufacturers to lower estimates.  This is in addition to the HPQ terrible news this week, and DELL lackluster news, showing weak demand. Add INTC to the gang as well and AMD further lowers their forecasts this evening.

SOX sideways triangle remains in play. Many times the sideways triangles will play out with a fake out move about two-thirds of the way thru (early 2012), and then the true directional move is opposite the fake out move. In this case, it would be down, a failure thru the lower rail.  The 20 MA is under the 50 MA, bearish. The RSI and stochastics are under 50%, bearish. The indicators are weak and bleak wanting to see a lower low in price print in the days and weeks ahead. Note how price tapped on the 200-week MA in July, perhaps price will want to tap on the 200 again.  The lower trend line, 200 MA and horizontal support form a confluence at 352-362 which acts as a magnet for price to test. This test may occur tomorrow.

Projection is for bounce to occur in markets but it may be very short-lived. The market bounce may correspond to a bounce from the confluence area described. USD is the semiconductor 2x ETF that moves up if semi's (SOX) move up.  The USD chart shows a failure of the sideways triangle already occurring. USD can potentially set up for a long from 27.70-28.40. HPQ, DELL, MRVL and AMD all appear to be basing so they all can be watched as potential long plays moving forward over the next days and couple weeks. INTC needs much more downside before basing.

Projection for SOX is a test of the lower rail confluence area at 352-362, perhaps tomorrow and/or Monday, and a bounce occurring, but overall, failure would be expected out the bottom of the triangle and sideways to sideways lower action for the months ahead. Do not rule out a move lower and complete immediate failure to occur.  As the SOX moves lower, watch the tickers listed above to potentially play the countertrend bounce back up for a short trade. 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.