Currently we have a P&F target of 445 for the SOX, however, we've had a pattern of steep rallies off of these types of pullbacks in the past year. This should resolve itself in the near-term.
SOX sector weakness has been plagued by an inability to break the 20 day EMA and 508 resistance on a closing basis for almost three weeks.Pockets of Strength NVDA, OVTI, ZRAN - Names with a Rising ADX LINE
The Yahoo message board for NVDA was buzzing with a message entitled " NVDA Now on TOP Short List". As it turns out Scott Sullivan of Briefing.com has a special feature for Active Traders where he posts scan results for the following trading day and he indicated that NVDA had staged a false breakout on Friday and was ripe for shorting. I wonder if he is shorting NVDA with his own capital. As far as I can see NVDA followed the market on Friday and is in the process of consolidating its recent gains. On a Fibonacci retracement basis, it is unlikely that NVDA will pullback much below $55.00 and it could just continue to move sideways until it's ready to move higher. Shorting strong stocks is not part of my game plan. I don't like getting squeezed.
OVTI is consolidating recent gains and could move higher anytime. Buy on a break of the consolidation high.
ZRAN looks like it is forming an ascending triangle.Extreme ADX Readings Despite Prices That Have Rallied off of Recent Lows - CYMI, LRCX, SNDK - This type of divergence usually precedes explosive price moves.
Watch CYMI for a close above its downsloping tendline.
LRCX has made a series of higher lows as it observes the support of it rising trendline. A close above its 50 day MA would be very bullish.
SNDK is a little harder to read, but keep it on your radar as it may surprise us with some follow through shortly.ADX Pauses (Flattens) after Recent Strength - CREE and PMCS - A pullback to the rising 20 day MA is likely for these two names.
ADX Curling Upwards after Recent Pullback - BRCM
BRCM looks like it will stage a turnaround in the very near term.
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