SOXX Index Breaks Above Key Resistance Area; Aimed Higher
Posted in Philadelphia Semiconductor Index (SOXX) on December 21st, 2009 by admin – Be the first to commentBy Jim Donnelly, Olson Global Markets
Evidence of improved expectations for a more stable economic recovery may be seen by viewing a chart of the Philadelphia Semiconductor Index (SOXX). Following a prolonged decline between the all-time high of 1999 through 2008, the SOXX Index has since turned higher from deeply oversold conditions on monthly charts. That however, is typical following such a massive selloff.
What is better news for the semiconductor area is the fact that it the SOXX Index broke above two (2) key resistance lines that both converged at the 310 level. Each of those former resistance levels had some importance. One was a trend line drawn off the all-time high set in March 2000 at 1,362 and the July 2007 intermediate high of 548. The other was a “cross†trend line drawn off a series of lows between 1995 and 2002 as well as the high print scored in July 2009.
Looking forward, the next key trend line resistance area to focus on now sits at 460. With many long-term (monthly) technical studies still locked onto “buy†signals, there appears to be a reasonable chance that a move up to the 460 level may occur over the intermediate-term. If it does, it would be one more sign that the equity marketplace and the economic are getting healthier.