Semi Focus
The
NDX 100
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) was turned upside down on Friday, with
75 stocks closing in the bottom 25% of their range. The leaders in price and
volume to the downside were primarily the biotechs after the previous sharp
short-covering rally.
NYSE volume was again
below average on the second day of the decline after the moonshot last
Wednesday. NYSE volume was 1.2 billion, with a volume ratio of just 17, and
breadth -835. The Dow
(
$INDU |
Quote |
Chart |
News |
PowerRating) declined 1.0% and has given back 64% of its
one-day explosion. The SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) was -1.7%. The Nasdaq
(
$COMPX |
Quote |
Chart |
News |
PowerRating)
traded average volume at 1.8 billion, but had a volume ratio of just 12 and
breadth -929. The Nasdaq Composite slid -3.0% and has given back 73% of the 7.8%
gain last Wednesday. The
(
$SOX.X |
Quote |
Chart |
News |
PowerRating), after gaining 11.1% close-to-close has
given back 8.1%. The Nasdaq rally
started from a 1560 low, which is just above the confluence around 1540 and
closed at 1600.85. See the April
15 text.Â
The
(
SMH |
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Chart |
News |
PowerRating)s rallied
15.2% from a 36.45 low to a 42 high and closed at 38.78, giving back 50% of the
15.2% move. The .618 retracement is 36.05. We will get another good trading
opportunity in the SMHs before the week is out.
Merrill Lynch downgraded
several defense stocks on valuation, as many have had big runs since September,
i.e.,
(
LLL |
Quote |
Chart |
News |
PowerRating) which has doubled since a Sept. 10 low of 61.70, closing Friday
at 130.47. Hopefully, this downgrade will see the profit-taking take these
stocks back down to their 50-day EMAs which will create some good buy
opportunities.
The
(
IJR |
Quote |
Chart |
News |
PowerRating), which is
in a bull market of its own, completed a 1,2,3 lower top and closed below both
the 2 point and its 50-day EMA. This small-cap 600 index has not had a
significant pullback since the September rally started. It did have a small 6.8
retracement in early February. The
(
MDY |
Quote |
Chart |
News |
PowerRating) had a similar run and if it trades
below the head-and-shoulder neckline, which is about 96, it could drop down to
the 200 DMA zone, which is 93.41, which is the EMA and the 91.20, which is the
SMA. The MDYs closed at 96.60.Â
The SPX closed at 1055
after hitting our number at 1089. The .618 retracement to the September low is
1033, while the low last Wednesday at the beginning of the 40 point rally was
1048. Inflection point zones always provide trading opportunities. Whether they
drop the Nasdaq to the 1540 confluence zone and the SPX to the 1033 retracement
level, or else we bounce off last week’s lows, it doesn’t matter for the
daytrader because it’s a win-win for us either way.
In the semis, stocks like
(
KLAC |
Quote |
Chart |
News |
PowerRating) have closed last week’s gap and will probably present trade-through
opportunities on the next rally. Last week’s low for KLAC was 51.60. It closed
at 54.40, down from a 59.53 rally high. The 200-day SMA is 52.57.
(
NVLS |
Quote |
Chart |
News |
PowerRating)
closed at 46.27 vs. its 42.68 low preceding the rally. Go through this exercise
with all the semis you like to trade and watch for intraday setups approaching
last week’s lows.
Stocks
Today
Nothing from the S&P
500 and NDX 100 screens set up on the daily charts, and you know where last
week’s lows are on the index and sector proxies for the shortside. Any rally in
tech from here, I continue to focus on the semis. Â
Have a good trading day.
Five-minute chart of
Friday’s SPX with 8-, 20-,
60- and 260-period
EMAs
Five-minute chart of
Friday’s NYSE TICKS