$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.
