We haven’t seen technology stocks lead the market for some time now. Everything runs in cycles. Looking back four years, probably few traders or investors, except the quite savvy, would have expected oil stocks to be the top traders they’ve been. Is the run over, and a new sector taking it’s place? Maybe.
Stocks in the Semiconductor Index have basically flatlined since mid-2003, with the SOX.X trading between the 400 – 550 level.. That should change soon. Take a look at the monthly chart of leading semiconductor company KLAC – KLA-Tencor Corp. You’ve got three attempts at breaking higher, which formed pivots at points 1, 2 and 3, and a 100% retrace from P1. There’s definitely some pent-up energy built into that monthly chart.
I bought some KLAC on it’s break from the downtrending channel today. It wasn’t the best close, as the stock pulled back to test the break. KLAC really needs to stay outside that channel now. My stop moves to the bottom of today’s candlestick.
MCHP – Microchip Technology has been a good trader for me in the group too, and looked similar to KLA-Tencor today.
