Thursday, February 7, 2013

SOX Semiconductors Daily Chart Inverted H&S Two-Leg Bull Flag Diamond Continuation Overbot Negative Divergence

Semiconductors have enjoyed a long up move bringing the markets up every step of the way. The maroon bars show the inverted H&S; head at 355, neck line at 390, target 425, for all purposes it is satisfied. The blue line shows the bull flag with first leg from 350 to 390 which is 40 handles, so the second leg starting at 375 targets 415, satisfied. The blue lines can also be treated as a diamond continuation pattern (see how price ran up for leg one then forms sideways price consolidation moves that create the look of a diamond, then price continues up for leg two). The red lines show firm negative divergence in place as price prints new highs. Spank down should be on tap. SSG to no surprise, the inverse ETF, is positively diverged and looking attractive from the long side. 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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4 comments:

  1. AnonymousFebruary 7, 2013 at 10:06 AM

    This has to be, hands down, the best blog out there. I've belonged to pay sites that don't offer near what Keystone offers. Thanks for all the effort you put into it.

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  2. AnonymousFebruary 7, 2013 at 11:31 AM

    KS, what do you think of being long SSG and also long AMD?

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  3. Keystone SpeculatorFebruary 7, 2013 at 11:44 AM

    Anon, you have to decide for yourself. SSG is a potential nice long trade as per the chart and TA highlighted above. AMD based nicely in November and is steadily moving up since, however, the move higher on the daily chart is stalling. The weekly chart remains optimistic for AMD pointing to higher highs in the future. Thus, probably some near-term choppiness and a pull back, but the weekly chart will come into play and the guess is that AMD will be printing higher numbers two or three weeks, or a month or so from now. The action now may set up a nice C&H pattern which would take it up to 4 again. The gaps at 1.90-2.22 are concerning, however, so price may want to fill these before the next leg higher. With all the love for HPQ, it is surprising more love is not shown to AMD, because AMD got slapped on HPQ bad news but is not benefiting as well due to the happy news, it may be a delayed reaction coming.

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  4. AnonymousFebruary 7, 2013 at 12:58 PM

    Thanks, KS.

    I noticed that SSG has a really small market cap, around $9 mil., and trades around 1,000 shares a day, which is not too liquid.

    I checked the ProShares holdings, and INTC represents 32% of the holdings. So, it may be just as well to just short INTC.

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