SOX TA:
2-year chart:
stockcharts.com[w,a]dahlnimy[de][pb50!b200!f][vc60]
In September 2000, after sitting in a high plateau all summer, the sector fell off a cliff. First the SOX, and then its 50D simple moving average, fell below the 200DSMA. In August 2000, it had briefly dipped below the 200DSMA, and this foreshadowed the complete collapse a month later.
Since then, the SOX and the 50DSMA have stayed below the 200DSMA. From May to August 2001, 5 separate attempts to cross the 200DSMA, all stalled and failed right at that line. Interestingly, there was one brief breach of that resistance line. It failed, but perhaps it was foreshadowing a successful attempt later. Like now.
The SOX 200DSMA is now at 569.5, and we are very close. So, if the ST uptrend since the late-September lows is going to continue, it's now got to get through a resistance that has held this entire bear market.
So......shorting at around this point is a reasonable idea. OTOH, if we do get over the 200DSMA, then it's time to hold all long positions, as the trend will have changed. |
