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Chart of the week – Further potential up move for US semiconductors after bullish breakout

semiconductor chips

Chart of the week – iShares PHLX Semiconductor ETF

Further potential up move for US semiconductors after bullish breakout

Medium-term technical analysis (1 to 3 months)

(click to enlarge chart)

Time-stamped: 7 Aug 2022 at 11:30 am SGT

Source: CMC Markets

  • iShares PHLX Semiconductor ETF (SOXX), a basket of major US-listed semiconductor stocks that consists of NVIDIA, Broadcom, Intel, and Advanced Micro Devices has rallied by +30% from its current 52-week low of 326.67 printed on 5 July 2022.
  • Recent price action on 3 August 2022 has staged a bullish breakout from its former major descending channel resistance in place since its 4 January 2022 all-time of 558.97.
  • Integrated technical analysis suggests the corrective rebound phase since the 5 July 2022 low remains intact; watch the 400.70 key medium-term pivotal support for a further potential up move towards the next resistances at 434.50 and 454.60 (200-day moving average, the upper boundary of the minor ascending channel from 5 July 2002 low & the 1.00 Fibonacci extension of the up move from 5 July 2022 low to 21 July 2022 high projected from 26 July 2022 low).
  • On the flip side, a break with a daily close below 400.70 negates the bullish tone for a deeper pull-back towards the next support zone of 380.00/361.00 before another potential leg of corrective rebound kickstarts.
  • Positive elements; price actions have pierced above and retested its 50-day moving before it rallied by 11% to print a recent high of 423.78 on 4 August 2022, current price actions have started to oscillate within a minor ascending channel, and the daily RSI oscillator has remained above its key corresponding support at the 54% level, it has not shaped any bearish divergence signal as well as has not reached its extreme overbought level of 82% which suggests that medium-term upside momentum remains intact.

 

 

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