Stock Sectors - Semiconductors, Oil, and the Nasdaq

When the dust settled, end of week market action had brought some major leaders to important support and resistance levels. Here’s a few I’m trading off of.

SMH - Semiconductor Holdrs: Trading in this technology sector has become exciting again. This holdr will probably touch its trendline before bouncing. I traded KLAC in the sector Friday.

The DIG - Ultra Oil and Gas Proshares ETF isn’t a major player, but it is plenty volatile. It’s one way to trade the oil sector, which I do keep track of. DIG touched it’s supporting trendline, bounced, then closed near the low Friday. VLO earnings Tuesday (I had thought it was Monday) before the bell should dictate movement here, and in the other oil stocks.

QID - Ultrashort QQQ Proshares ETF easily moved to it’s 200 ma on the 5 minute chart, and marched higher, trading to trendline resistance where the 50dma also sits.

While I believe it’s important to track, and trade these levels, I have the best results when I trade individual stocks relating to the price patterns they portray. This quote from Jeff Cooper sums up that thought.

“The important thing to remember is to trade strongly trending stocks according to their own position rather than juxtaposing the action of the broad market onto the stock.

Poor market tone may affect a locomotive of a stock but that does not necessarily translate into derailment, especially if the indices, although jagged and with meager internals, have not registered a confirmed sell signal.”

Locating tops and bottoms is important, but focus on trading patterns is most important, and a fine balance.