Lots of chatter this evening about the strength in the Semiconductor HOLDRs ETF.. SMH – let’s take a look.

The ETF, itself, does look good.  Nice bounce off horizontal support and it’s resuming its position above sma200.  Under the hood, all of the indicators are oversold and have turned back up over the last few days.

Top Holdings
Company Symbol % Assets
Texas Instruments Incorporated TXN 21.24
Intel Corporation INTC 18.94
Applied Materials, Inc. AMAT 11.20
Altera Corporation ALTR 7.99
Analog Devices, Inc. Common Sto ADI 6.67
Xilinx, Inc. XLNX 4.83
Linear Technology Corporation LLTC 4.77
National Semiconductor Corporat NSM 3.98
KLA-Tencor Corporation KLAC 3.57

TXN –  Good looking channel trade setup.  An entry here small with stop set if it retraces below channel might be a good trade… if nothing else, it’s a measurable move.. Your target is the top of the channel with comfortable stops as you go along.  Watch for how it behaves at sma200.  I would consider adding to small position if it moves above and trail the stop.

INTC – I’m not interested in this trade.  You can see by the chart below that there is just too much resistance above. Intel isn’t exactly a mover 🙂

AMAT is forming a rounding bottom on the daily chart inside a previous trading range.  My trade is to wait for it to get out of this range (right now stands at EMA23) and then consider a position long.

ALTR probably has the best overall chart of the primary SMH holdings.  It has been stepping up for over a year and this pullback might just be a prime opportunity to pick it up.  I’m looking for a long trade above horizontal resistance near 45.

ALNX has a good up-trending chart, as well. However, today’s move up  has me more interested in the laggards.

KLAC is another good looking falling wedge. I love falling wedges.  With KLAC, there is the option to pick it up here since most of the indicators are starting to turn.  Or, You would wait for it to resume an uptrend by first breaking through the top resistance line.  That’s where I’ll look for it.. around sma50.

Others to consider:




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