TVC:SOX   PHLX SEMICONDUCTOR
Semiconductor stocks have slid this month, but some traders may be looking for a bounce.

The first pattern on today’s chart of the Philadelphia Semiconductor index is the 2892 level. It was the close on February 22 that was tested and held twice in March. SOX briefly fell below it yesterday morning but rallied back to close above it. The result was a false breakdown and a hammer candlestick -- both of which can signal reversals.

(The horizontal line is also near the December 13 high, which may suggest old resistance has become new support.)

Next, the index has remained around the same area after falling sharply on Tuesday. Investors following the “three-day rule” of waiting after a drop could now feel more comfortable nibbling.

Third, Thursday’s bounce occurred at the 100-day simple moving average (SMA). That SMA could be important because it’s mostly tracked the longer-term trend since early 2022.

Fourth, stochastics are trying to rebound from an oversold condition.

Finally, the news flow may favor chips. Intel beat earnings estimates last night, and coming weeks will feature other names like Advanced Micro Devices (May 2) and Nvidia (May 24).

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