Semi-Bungee
As I explained in Wednesday’s commentary, when something in the market is
completely obvious it is sometimes a trap. As the semiconductors cratered
Wednesday, they broke key long-term support levels and seemed destined for
disaster. So just when it seemed to be curtains for the semis, they bungeed back
for a 13% gain.
Many of them managed to close back up above those long-term support levels,
and many did so on heavier-than-average volume. Are we out of the woods with
regard to the semis? Well, with earnings warnings still coming from companies on
a daily basis, I would say not yet. For that matter we could see the SOX go
straight back in the other direction. That is why as a trader, you’ve got to
remain prepared for either scenario.
Holding up relatively well during the recent plunge was Novellus
(
NVLS |
Quote |
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News |
PowerRating),
which broke near-term support Wednesday but jumped on the bandwagon when semis
rallied on Thursday. The fact that Novellus did so on heavier-than-average
volume was encouraging, as was the fact that it resisted falling back to its
December lows.
Until Friday,