Applying For Leadership
When the SOX broke long-term support last week, it
looked like it was curtains for the chips and the greater Nasdaq as well. But as I clearly pointed out in my April 4 column, what looked so obvious actually didn’t
happen.
This morning’s upgrade of the semis by a reputable
analyst who saw chip troubles as far back as July 2000 helped spark the rally
in the SOX. Applied Materials
(
AMAT |
Quote |
Chart |
News |
PowerRating) had held up well during last week’s
route in the chips, so that put it in a good position for Wednesday’s jump.
Notice on the chart how AMAT refused to fall back to its December lows.
AMAT recaptured its 50-day moving average
Wednesday on 150% of average volume Wednesday, and I will be watching to see
if AMAT can continue higher on increasing volume. Its next test will be
whether or not it can take out its March 23 high of 52.40.
For now, the semis can still be considered
potential leaders, and we will wait to see if they get more confirming upside
volume in the coming days.
Till later,
Eddie
Gary
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