Semiconductors - Update

After gapping lower on the open, the SOX found support at its 50 day SMA and carved out a piercing line reversal pattern. Many of the top names in the sector had similar patterns. As noted on the above chart, the SOX is approaching the oversold level and could see an interim bounce to 540. Some names of note and their corresponding patterns for Wednesday Feb 22nd are: Bullish engulfing: MRVL, AMD, SNDK and LLTC (this last name close to a bullish engulfing). The last two names were on higher volume. CREE carved out a bullish morning star pattern. MCHP, TXN, and KLAC qualify as piercing lines and I really like the volume on MCHP. Other names which were bullish yesterday were MXIM, BRCM and TRID.

N.B. The pullback is still in play as the SOX continues a series of lower highs and lower lows. However, within that context, we will rally towards resistance at key pivot points.

P.S. I'm still very bullish on GNSS which is consolidating its recent gains.