Have Chipmakers Already Bottomed?
Most people know that technology stocks ended 2022 on a weak note. But they may not realize one group started to outperform: chipmakers.
The first pattern on today’s chart of the Philadelphia Semiconductor Index is the falling trendline along the highs of last year. The S&P 500 is currently sitting at similar resistance, but SOX has been above its respective trendline since mid-November.
Notice how it stayed on the upper side of the pattern last month. That may suggest old resistance has become new support.
Next, that bounce occurred at 2449, an old monthly high from October 2020. Again: old resistance, new support?
Finally, chipmakers have shown relative strength as inflation cools and the Chinese economy reopens from its most recent lockdowns. It’s also interesting that yesterday its biggest member,
Taiwan Semiconductor, jumped after reducing capex plans. Management also predicted the chip market will bottom in the first half of this year.
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TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart of the Philadelphia Semiconductor Index is the falling trendline along the highs of last year. The S&P 500 is currently sitting at similar resistance, but SOX has been above its respective trendline since mid-November.
Notice how it stayed on the upper side of the pattern last month. That may suggest old resistance has become new support.
Next, that bounce occurred at 2449, an old monthly high from October 2020. Again: old resistance, new support?
Finally, chipmakers have shown relative strength as inflation cools and the Chinese economy reopens from its most recent lockdowns. It’s also interesting that yesterday its biggest member,
Taiwan Semiconductor, jumped after reducing capex plans. Management also predicted the chip market will bottom in the first half of this year.TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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