Thursday, January 27, 2011

Daily Market Commentary: Semiconductors Come To The Fore

There was very little reaction (or room to maneuver) in the main indices. So it was left to the semiconductor to do all the running. The Philly SOX closed just shy of a new high, but is well positioned to push on to channel resistance above 460. The other benefit of today's gain was the reversal of technical weakness in the MACD and CCI.

($SOX)

via StockCharts.com

Just for the record, the Russell 2000 closed with a narrow doji wedged between yesterday's gain and former channel support. Shorts might try to play a downside break of today's low, although any break is likely to be brief given the proximity of 50-day MA support.

($RUT): "

via StockCharts.com

The Nasdaq got to touch former channel support-turned-resistance on its fourth day of gains. If there was an opportunity for bears to strike then this is it; short resistance test and play for the 50-day MA.

($COMPQ)

via StockCharts.com

Look to the Nasdaq and Russell 2000 for early leads as shorts may be early aggressors. Should Tech and Small Caps push higher then the semiconductor index - as it breaks to new highs - might be the one to trade.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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