Semiconductor's (Very Modest) Breakout Phase I

There wasn't much on offer by the close of business as early losses were returned by the close. The Semiconductor Index may have had the best of the action, although the relative gain was small. The index crept over declining resistance, but has another resistance level to challenge soon. Support at 659 remains in play, but if it breaks it becomes a shorting opportunity.


The S&P ended the day at neckline resistance of the head-and-shoulder reversal.  Volume was lighter in the recovery. Tomorrow is set up for a short with a tight stop above 2,028. A more flexible stop would use the 20-day MA as a marker.


The Nasdaq remains inside its channel. Today's action was relatively neutral, but a push against resistance would key up a breakout like in the Semiconductor Index.


Unfortunately, the Russell 2000 was unable to clear channel resistance. However, this just delays the chance for a handle breakout.


For tomorrow, the Russell 2000 needs to push on to maintain the momentum in the Semiconductor Index, and to create an opportunity to negate the head-and-shoulder reversal.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. You can read what others are saying about Zignals on Investimonials.com.

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