Semis Hog It Again
A late-day slump
left most of the tradable funds in the minus column Friday,
while a rally in chip and chip-gear stocks pushed Merrill
Lynch’s semiconductor basket to its sixth straight gain.
The Semiconductor
HOLDR
(
SMH |
Quote |
Chart |
News |
PowerRating) advanced 2.5% on strong volume, the day’s
biggest gain among the
funds. That marks a 29.5% gain from the HOLDR’s Aug. 3
intraday low. For more analysis on the trading action in
semis, check out Friday’s
The News column.
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Among the basket’s
components, National Semiconductor
(
NSM |
Quote |
Chart |
News |
PowerRating) rose 3 3/8 to
45 7/16 on active trade, Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating) 10 5/8 to 258
1/8. Broadcom appears close to emerging from a five-week
base. National Semiconductor needs to overcome its
9/16, and its 50-day moving average.
For long trades, I
shun stocks that are priced below their intermediate-term
moving average and mid-level on the assumption that they are
weighed down by too much overhead
supply. Overhead supply is the amount of shares
in the hands of shareholders with paper losses. These
rallies, blunting further share-price progress. You can find
a stock’s mid-level by summing the pre-correction high and
the post-correction low, then dividing the result by 2.
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The bruised
retailers
(
$RLX.X |
Quote |
Chart |
News |
PowerRating) followed through on Thursday’s
bounce, albeit on light trade. That helped to lift the
Cyclicals/Transportation SPDR
(
XLY |
Quote |
Chart |
News |
PowerRating) to a 1.2% gain.
Among the retailers, The Gap
(
GPS |
Quote |
Chart |
News |
PowerRating) added 1 to 27, Best
Buy
(
BBY |
Quote |
Chart |
News |
PowerRating) 2 15/16 to 73 3/4.
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On the downside,
the Pharmaceutical HOLDR
(
PPH |
Quote |
Chart |
News |
PowerRating) lost 2.1%, the day’s
biggest decline among the U.S.-focused ETFs. The Biotech
HOLDR
(
BBH |
Quote |
Chart |
News |
PowerRating) fell 2.0%, the Basic Industries SPDR
(
XLB |
Quote |
Chart |
News |
PowerRating)
1.8%, the Dow Jones Internet Index iShares
(
IYV |
Quote |
Chart |
News |
PowerRating) 1.5%.
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If you’re new to
exchange-traded funds, be sure to visit TradingMarkets’
explaining the basics of trading and active investing in
ETFs and mutual funds. Just click on the
page, then click on the Knowledge
Center tab.
You also will find
lessons on trading exchange-traded funds in the Stocks
Education area of TradingMarkets.com. In particular, check
out my three-part series on trading ETFs, starting with
Average Crossovers. I also recommend that newcomers read
my tutorial
HOLDRs: Unique Opportunity And Risk.