The Bears Tried to Sink Chipmakers, and Failed
Chip stocks have lagged along with the broader technology sector. But just when you think they’re dead, they have a session like yesterday.
Notice how the Philadelphia Semiconductor Index opened 2.2 percent below its close the previous session. Also notice how quickly it bounced and ended the session up a full 2 percent.
The low was lower than Tuesday’s and the high was higher: a textbook bullish engulfing candle.
In isolation, that’s interesting for the bulls. But there’s more because the weekly chart is trying to form a bullish inside candle with a higher low and a lower high. Following a drop like we’ve seen in the last month, that can signal a steadying in price before a change in direction:
Next, stochastics have shown an oversold condition all month (on the daily chart). It’s gradually lifting.
Finally consider the descending trendline that began on April 27. This creates the potential for a bullish breakout if the current range holds.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Notice how the Philadelphia Semiconductor Index opened 2.2 percent below its close the previous session. Also notice how quickly it bounced and ended the session up a full 2 percent.
The low was lower than Tuesday’s and the high was higher: a textbook bullish engulfing candle.
In isolation, that’s interesting for the bulls. But there’s more because the weekly chart is trying to form a bullish inside candle with a higher low and a lower high. Following a drop like we’ve seen in the last month, that can signal a steadying in price before a change in direction:
Next, stochastics have shown an oversold condition all month (on the daily chart). It’s gradually lifting.
Finally consider the descending trendline that began on April 27. This creates the potential for a bullish breakout if the current range holds.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
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