Technician's Alert: The Semiconductor Index Appears to be Topping
Our resident technician see $123 as the logical price target if (and only if) the semiconductor index topping pattern completes
- A head-and-shoulders topping pattern is forming in the semiconductor index.
- Fireworks are possible.
Let’s get serious about the semiconductor index.
This beast has a perfectly good chance of completing a small but spectacularly well-formed head-and-shoulders top. Indeed, it would take only one good down day, no more dazzling than last Friday’s, to get the job done. I would like to offer unto you my target for such a measured move, tinted in green:
My own position is anchored to October puts on the SMH itself. Thus, the measured move there is more germane to me. It’s as easy as 1-2-3. In other words, as aggressive as it may seem, $123 appears to be a logical price target if (and only if) this topping pattern completes, which would be signaled by the SMH slipping beneath $143.
By way of the measurement tool in SlopeCharts, I have roughed out the target in the same fashion:
Let’s just say that the week ahead has the prospect of being much more interesting and memorable than most. There are an abundance of diamond patterns and rounded tops, and with the FOMC meeting looming on Wednesday, there could be some real fireworks.
Tim Knight, a charting analyst with 35 years of trading experience, hosts Trading Charts, a tastylive segment airing Monday-Friday. He founded slopeofhope.com in 2005 and uses it as the basis of his technical charting and analysis. Knight authors The Technician column for Luckbox magazine.
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