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Double Bottom For Semiconductors? at Trader’s Narrative

The semiconductors have been one of the weakest spots in this market. But is that a double bottom I spy on the semiconductor ETF?

SMH double bottom.png

It certainly looks that way. Especially with the second bottom being a beautiful hammer candlestick. If SMH can break above $33.50 decisively then I’d be even more bullish.

But even right now, there are other technical reasons for a bullish bias. On the Philly SOX index, 430 is a support level from the October 2005 bottom. Also, currently the sector’s breadth is horrible with only 20% of stocks in the ETF above 200 day moving average and about the same above the 50 day moving average. In recent times, this was ony more negative in the summer of 2004 when we had an intermediate bottom.

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2 Responses to “Double Bottom For Semiconductors?”  

  1. 1 nodoodahs

    If you drew a trendline on the SOX from the lows of Sept 2004 to the lows of May 2005, that same line would touch the lows just made.

  2. 2 rad

    you might be right on double bottom, on a closing basis we have a higher low, the MACD is also pointing to an intermediate bottom and you have DMark sending a buy signal and bollinger/parabolic busting out. Given negative sentiment b aked into the stocks I would expect a near term rally off of 2Q earnings.

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