PHLX Semiconductor Index (SOX): Long-term reversal

The PHLX Semiconductor Sector (SOX) is a Philadelphia Stock Exchange capitalization-weighted index composed of companies primarily involved in the design, distribution, manufacture, and sale of semiconductors.

 With heavyweight Intel getting hammered today, the outlook of the broader semiconductor index obviously gets dragged along. The already unconvincing outlook of the past months has taken a turn for the worst by breaking below cloud support at 1299. The minor internal trend line at 1272 is now scrutinized but a move lower seems a mere formality.

Focus is on the reasonable support zone at 1211 at first. Below that a new primary down trend takes hold towards 1122 (daily projection) and probably a lot lower on a 6+ month horizon. After all, the current breakout means the start of a multi-month corrective phase with very substantial down side risks.

Avoid any longs in the sector. New short-entries are justifiable as long as prices hold below ~1345 over the next weeks.

  • Near term trend: negative
  • Long term trend: neutral
  • Outlook:¬†long-term reversal expected
  • Strategy: avoid/exit-long or trading short-entry
  • Support: 1272 / 1211 / 1122*
  • Resistance: 1345 / 1360+
  • Outlook cancelled/neutralized above 1345

Daily chart SOX Index