SOX Semiconductor Daily Chart Overbot Rising Wedge Negative Divergence Upward-Sloping Channel

The weakness in the semi's is another negative market sign but traders are too busy drinking from the Fed punch bowl to notice. The collapse out of the red rising wedge is textbook technical analysis (TA). The stochastics were overbot, the RSI near-overbot, the red lines show the negative divergence across all indicators, and the rising wedge all create the price collapse. Note the doji candlestick which is the cherry on top that identified the exact top. The coming days are very important starting today since price decided to spend the night sitting on the lower rail and will decide today if it falls through, which would halt the rally from mid-November, or, if the bulls can bring the semi's higher back up into the safety of the channel. The indicators are weak and bleak and want to see lower prices.

The 20-day MA is key for all stocks and indexes and price fell through the 20 yesterday so use that as another sign post today. The brown H&S may develop moving forward with head at 442, neck line at 417, target is 392 if the 417 fails. If price collapses from the channel, a back kiss of the lower rail may occur in the days/weeks ahead and that could serve as a right shoulder for the potential H&S. The neon green circle shows a juicy gap at 390 as well. Watch to see if price collapses out of the channel. Also pay attention to the 20-day MA at 429.48. 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.