Semiconductor Stocks Struggle
Anytime the major stock market indexes rally it is very important to look at the leading stock sectors. When a leading sector fails to participate in the rally that is usually a sign that the rally could be short lived. This morning, the Dow Jones Industrial Average is trading higher by nearly 100.00 points. The rally looks very good on the surface and traders are in the mood to buy stocks once again. However, there is one important sector in the stock market that is not trading higher and that is the semiconductor stocks. The semiconductor sector usually leads the NASDAQ Composite and most technology stocks higher, that is not occurring today.
The Semiconductor Holder Trust(NYSE:SMH) is trading lower by 0.10 cents to $32.43 a share. Yesterday, the SMH sold off trading down to the March 16, 2011 low, this level is being tested again this morning. This level is short term support at this time, however, if the SMH does not bounce from this support level it will most likely trade lower very soon. The SMH is also trading right on the important 200 day daily chart moving average which is very important as support. Short term day traders can look for intra-day support on the SMH around the $32.00 level.
Broadcom Corp.(NASDAQ:BRCM) is trading lower by 0.25 cents to $31.52 a share. This stock has been in a down trend since January 2011. The stock is now trading below all of its major moving averages which puts the stock in a very weak chart position. The stock will have some minor intra-day support around the $31.20 level intra-day.
Other leading semiconductor stocks that look weak today include Sandisk Corp.(NASDAQ:SNDK), Texas Instruments Inc.(NYSE:TXN), and Lam Research Corp.(NASDAQ:LRCX). Traders and investors must always pay attention to the semiconductor sector. This is a technology leading group of stocks that will often tell traders where the strength in the market really is. Right now it is not in technology.