The semiconductors have been one of the leading sectors of the NASDAQ since the 1990's. Recently the semiconductor index has been lagging the NASDAQ since January 2010. Historically the semiconductors have lead the index higher, which has not been the case as of late. However, today the index is flexing some muscle by trading sharply higher on the day.
Many leading individual semiconductor stocks that have been lagging by trading below their 52 week highs are showing strength today. They include Intel Corporation (NASDAQ:INTC), KLA-Tencor Corporation (NASDAQ:KLAC), Applied Materials, Inc. (NASDAQ:AMAT), and Texas Instruments Incorporated (NYSE:TXN) just to name a few. Intel Corporation is actually at a new 52 week high today breaking above it's January 2010 level.
The important chart here is not the individual names that are all running higher like a pack of wolves, it is the Semiconductor HOLDRs ETF (NYSE:SMH) chart that should be watched closely. This index looks to be at a very good resistance level on the daily chart at 27.75 – 28.25. This could certainly be a pullback level for this ETF. It is important to remember if they all trade higher together they usually all pullback together.
Nicholas Santiago
Chief Market Strategist
InTheMoneyStocks.com
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