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10/13/2004 Archived Entry: "Fibmaster's Daily Update"

Sector Focus: SMH Semi Conductors Sector
Current update Oct 13: My Sept 23 comments about resistance, especially the $35 area are still valid. Could be some good shorting setting up in the future! The SMH chart has some similarity to QQQ. There is a daily up-channel within a weekly down-channel.
For the near-term, there is resistance at $32.00, $33.50, and then $35.00 and $36.50. Intraday scalpers look to exit longs and enter shorts on signs of resistance at those levels.
For the very long term (those buy-and-hold investors who have suffered so long), there is support in the $27.50 to $28.50 area.
For more details, see video on website:
http://fibmarkets.no-ip.org/updates/daily/Oct13_SMH.html

Update Oct 4. That support at $27.78 held, and the bulls are rallying a bit. The Sept 23 comments about resistance, especially the $35 area are still valid. Could be some good shorting setting up in the future!

Sept 23 - This sector has been ruled by bears since January this year, where it topped out at about $45.00.. There is some hope, for those poor "buy-and-hold" investors, but it's not that great.. The weekly chart for SMH has some support at $27.75/$28.25, so we may see some buying at those levels.
I'm not too optimistic though. There is a huge down-sloping channel on the weekly chart, with a bottom currently at about $27.75 and a top at about $34.25. In addition, the weekly chart has significant resistance at the $35.00 level (SK resistance). So the upside is at about $35.00 on my chart.
That gives enough room for near-term traders to take a respectable profit, but not for the sector to recover. I would not be surprised to see this chart consolidate in the $27.75 area to $35.00 area. This is a longer term weekly chart. So intra-day and on an end-of-day chart there are profit opportunities in that range of $27.75 to $35.00. Suggestion: Look to buy semiconductor stocks when SMH is near the lower level $27.75, and look for shorting opportunities near the upper boundary $35.00.

Neal Hughes, FibMaster at http://www.FibMarkets.com, is a widely respected expert on Fibonacci Analysis. Neal has been in the markets for over 20 years, and has distilled what he has learned into a complete trading methodology that maximizes gains and controls risk which he publishes in his newsletter, ProfitPoint. He is also the author of several universally acclaimed Video Seminars on his website. For those new to Fibonacci analysis, Neal provides FREE Fibonacci lessons, available here: http://www.fibmarkets.com/cgi-local/aefs/signup.cgi
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