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SOXX trade ideas

SOXX Harmonic Elliott Wave and Hurst's Cyclic AnalysisOverview: in the previous update I published on May 27th, I had SOXX close to the completion of wave (III) of c of 3 of (A) of 5. Update: our proposed structure/path has been followed nicely. Analysis of the structure: I think we are in wave 4 of (A) of 5 developing as a flat correction. Note that wave (IV) of c of 3 also developed as a flat correction, complicating the analysis of this chart a bit. Based on the fib retracement of wave 3, I see 486.74 or 467.62 as my potential targets for wave 4 bottom. Analysis of the cycles: we are in the second 40D cycle of the second 80D cycle of the first 20W cycle of a 40W cycle. The upcoming 20W cycle is expected at the end of August. We have not yet seen any FLD breaks to the downside to generate targets.
NASDAQ:SOXX
by bamdadsalarieh
1
SOXX 2D: WHERE ARE SEMI'S HEADED?SOXX, 2D: Taking a look at the SOXX 2D chart I have drawn out a linear regression channel beginning on November 12, 2021 which was about 7 weeks prior to the ATH print at 557.12 on January 3, 2022. The SOXX proceeded to decline approximately 41% from ATH (557.10) down to its recent low at 326.70 on July 1st, 2022 before rallying almost 30% off the floor to 424.78. So, where are we now, and where are we going next? Linear Regression: The linear regression channel in the chart is divided up by color and is illustrative of 6 standard deviations of potential price action expressing a 6 sigma potential linear range of 435.18 – 279.37 with the high confidence interval range (+-2SD) from 408.93 to 305.61. Our linear mean is currently sitting at 356.78 with a Pearson’s R^2 indicating a high central tendency at 0.894. the linear mean and is currently expressing a potential linear range of 435.51 (+3SD, red) to 308.20 (-2SD, blue). As we can see the recent rally is filling out the upper end of the linear range, clearly pushing deeply into the upper 3rd standard deviation range off the linear mean. Using central tendency as an approximation of trend strength there is a high potential for price to mean revert down to the 356.78 price region. Fibonacci Retracements: I have left the Fibonacci Retracements up in the background and have also added white lines to mark the significant levels of 0, 0.5, and 1 retracement respectively. Despite the overextended nature of the recent rally, price failed to breach the 0.5 Retrace at 441.91 which would have gone a long way to indicate a high potential for the lows to be in. It is important to note that if price were to breach the 0.5 retrace to the upside it would reduce the probability for lower lows this year but would not eliminate them entirely. Elliot Wave: It is my position that we are in the 5th wave down from the ATH as illustrated by the yellow EWT count on the chart. Given the somewhat unruly nature of 5th waves and their increased potential for irrational behavior, we will leave some grace with regard to our expected landing zone. It is my prediction that we will bottom out somewhere in the 334-303 range as illustrated in the yellow, square box. This thesis is in confluence with market trends during mid term election years in the month of September, which is that they have a tendency to decline through the month of September and early October before rallying into the late fall/winter after the election. EMA Envelope: Our EMA envelope (top box), is a trend based EMA indicator based on the last 40 days. The envelope turned bearish(red) with a body close below the 387.12 price point and would turn bullish (green) if price were to bounce back up over the 405.83 price point. Signal is currently residing in the neutral zone as indicated by the yellow in the top box. VFI (Volume Flow Index): Our volume flow index is a fixed range cumulative indicator based on the last 130 periods, which on a 2day time frame spans the last 260 days. As we can see the green line representing the volume flow is crossing over its moving average to the downside. Please also see that our VFI signal also failed to breach the zero and has not risen above the zero line since the late March rally. RSI: Our RSI is sourcing data using a hlcc range configuration to add data point density to the measurement and potentially at the sacrifice of a more discerning measurement that might come from using a close only price range configuration. What we see is our RSI signal currently entering the bearish end of its range (<45). MACD-X: Our MACD indicator is showing our lag differential (12-26) crossing over our 9 period ema to the downside and beginning to print its first few bars of negative trend coming off the recent rally which began at the beginning of July for the SOXX ETF. SUMMARY: We have moving average trends rolling over to neutral from being recently bullish, volume flows that have been trending upward recently but not at levels supportive of 2021 price levels, an RSI that never hit overbought and has since reverted back to its median and a MACD beginning to indicate the potential for a downward trend to emerge. What the above summary of indicators appears to be from my perspective is an upward retracement within a larger downward trend, or what is more commonly known as a “bear market rally”. It is my position that price will decline to its linear mean at 356.78 before making a decision of whether to spill further or consolidate in a range bound, downward trending diagonal. Until fundamental headwinds provide a better catalyst for the technicals to improve going into the late fall/early winter it would not be unreasonable to expect further downside volatility.
NASDAQ:SOXX
by Firewalker_Charts
Double whammy of demand contraction and political leverageSummary The semiconductor sector is expected to enter a difficult period with demand contraction due to recession and crypto winter. As the US government is increasing the effort to use semiconductors as a leverage to put pressure on China, companies in the sector might be forced to prioritize the national political agenda against profit and growth , which further amplifies the negative impact from slowing demand. Demand contraction The US economy officially entered a technical recession as the GDP figure announced this week unexpectedly shrank again by 0.9% , making a 2 quarters consecutive decline. Large employers such as Amazon are also announcing their layoff plan to better weather the worsening economic outlook. Companies downsizing will reduce the demand for office electronics such as laptops and work phones. Although the commonly reported U3 unemployment rate remains stable at 3.6%, the U6 unemployment rate has actually increased for 2 consecutive months from 6.6% to 7% . With states continuing to pair back the covid unemployment benefit, more people are forced to re-enter the job market which in some cases the pay are not even as good as the unemployment benefit they have been receiving. The reducing disposable income of the US consumers is likely to negatively impact the demand for goods, especially for the non-essential durable consumer product such as electronics. High food and energy prices also contribute to such change in spending allocation. Political leverage Semiconductor chips are one of the most critical building blocks for most electronic products. The new product trend such as electric vehicles further push up the demand for chips. To put it into perspective, a Ford Focus uses roughly 300 semiconductor chips, whereas the electric Mach-e utilizes almost 3,000 semiconductor chips. The US government has been using national security reasons to block companies from selling gears for fabricating advanced chips (<10nm) to China since the Trump era. This week, the Biden administration has notified equipment suppliers such as NASDAQ:KLAC and NASDAQ:LRCX that the restriction is further tightened to <14nm , and it will also cover fabrication plants run by non-Chinese companies such as NYSE:TSM in China. Semiconductors will continue serve as a tool to slow Chinese growth at the cost of industry profitability. Earlier this week the US Congress had passed the chips act and approved $52 billion in funding for domestic semiconductor manufacturing. While there is definitely a strategic necessity to rebuild the US fabrication ability given the political tension between China and Taiwan , the difficulty to establish a fabrication facility should not be underestimated, if you look at how hard even for Samsung to catch up TSM on defect rate especially for the <7nm advanced chips. For most semiconductor companies it is not just about the funding but also if there is a profitable way out for domestic production, or it is going to be a capital blackhole that keeps sucking investment without meaningful outcome. Technical discussion The US equity market is currently rebounding as rate expectation cooled off due to increasing risk of recession. S&P500 and Nasdaq100 have already broken through the 50 days moving average and are now challenging the Jun rebound peak. The 20 days moving average is also catching up and is about to sit on top of the 50 days moving average. In fact, the sustainability of this rebound will depend on how long can the 20 days stay above the 50 days moving average, as (1) upward pointing 20 days and 50 days moving average, with (2) 20 days higher than the 50 days moving average are the basic forms of a bull market. S&P500 NASDAQ100 In this regard, by comparing SOXX and QQQ, one can visualize the sector discount due to the double whammy discussed above. Although SOXX has also broken through the 50 days moving average, the 20 days moving average is still further away from the 50 days moving average , which makes it a better short candidate compared to QQQ for those who believe the recent uptrend is a bear rebound but not the beginning of a bull. Here are the levels SOXX trader should pay attention to: Downside Resistance 370 - 385: 20 days and 50 days moving average levels 326.7: Jul-05 52 weeks low 270-280: Post-covid bull breakout level in 2020-Jun Upside Resistance 433.99: Jun-02 rebound peak 455-465: 250 days moving average level 501.09: Mar-29 rebound peak While our view toward the semiconductor sector remains bearish, shorting too early in a rebound can be very costly to traders. It is recommended to scale in the position either when SOXX itself, or at least until the border markets show sign of momentum decline (e.g. reverse hammer candlestick pattern) Note: For traders who wish to trade leveraged ETF such as AMEX:SOXL (3x bullish) or AMEX:SOXS (3x bearish), it is still recommended to use the non leverage version SOXX for technical analysis purposes. As the daily 3x process sometimes will shift the resistance level and make the reading less accurate.
NASDAQ:SOXXShort
by geoffreyip523
Nice trade idea for SOXX! Semiconductor companies offer a lot of highly liquid securities that encourage risk-taking in all time frames, from intraday scalping to monthly market timing. The sector also supports various profit strategies, including momentum trading, basket allocations and short selling. It acts independently in many market phases, going its own way while major indices push higher or lower. This divergent behavior brings additional opportunities, even in difficult macro conditions. There are many ways to trade the semiconductor space, from identifying particular stocks to investing in the sector as a whole using exchange-traded funds (ETFs).
NASDAQ:SOXX
by UnknownUnicorn38289576
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NASDAQ:SOXX
by Sunstorminvest
$SOXX SEMI CONDUCTOR STRENGHT WILL NOT BE DENIEDI like the setup I am seeing for resolution to the upside for semi-conductors here. I do have one concern but I'll address that shortly. On the left is a weekly candle chart of SOXX the iShares semi-conductor ETF. The upward trendline from the covid-crash trough is firmly intact. The 100 Day EMA has proven to be key support. The index started consolidating the second week of November after a 10% move up the previous week. The index has been in that consolidation period ever since - perfectly normal and healthy. During the consolidation phase a support level around $516 has been established. What I don't like are the upper wicks on the candles during this consolidation phase. It shows that prices have not been able to breakout to the upside despite trying to push higher. If your looking for an entry, either a level down closer to support or a close above the upper wicks would be a better spot then where the index currently sits. I do believe that the current evidence points to a breakout of the consolidation. Here's my case: 1) The long term uptrend is firmly intact. 2) Consolidations are continuation patterns. 3) Relative strength to the broader index (soxx/spy) is testing a breakout level after forming a deep base that goes back nearly a year. 4) After a tough chop-filled week in the markets XLK showed relative strength to SPY on Friday's close. The majority of the names in the XLK that outperformed it's sector were semi-conductor names. 5) XLK/SPY showed a move higher before getting to previous support - relative strength improving due to semi-conductor names in the XLK. Links to my watchlists: SPY Sectors - www.tradingview.com XLK Holdings - www.tradingview.com SOXX Holdings - www.tradingview.com Toggle by change% and everything above the index ticker outperformed for the day.
NASDAQ:SOXXLong
by Breakout_Charts