Semiconductor channel breakout

A solid day for indices delivered a good week for Semiconductors. After a four month decline there was a clear breakout that took out the October swing high. Strength in the Semiconductors has, and will likely continue to feed into the Nasdaq and S&P.

Strength in the Semiconductors delivered key breakouts for both the Nasdaq and S&P, negating what had been picture perfect short trades for these indices at resistance. It will be interesting to see if there is any upside follow through off the back of this reversal driven by short covering.

Technicals are net positive for both the Nasdaq and S&P.

The Russell 2000 ($IWM) closed with a bullish harami, a solid reversal pattern; a short term 'buy' with a stop below Friday's low offers itself as a short term trade. Technicals remain mixed with stochastaics particularly favoring the bearish side of the story. It will take a number of days of buying to reverse this bearish momentum.

For the coming week we have the Nasdaq and S&P in the proces of building a right-hand side of a base kicked off from the July swing high. It's an easier path for these indices than the Russell 2000. The latter index needs a solid advance to take it back to the 50-day MA at a minimum, and really, should take out the 200-day MA too.

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Investments are held in a pension fund on a buy-and-hold strategy.

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