Investors like a good risk-on stock market environment. And that is often accompanied by technology stocks leadership.
Yesterday we looked at an important bull-bear break line for a key Nasdaq ratio that is testing important support.
Today, we stick with technology but look specifically at the Semiconductors… and a key test of resistance occurring right now.
Below is a “monthly” chart of the ratio of Semiconductors to the S&P 500 (broad market). As you can see, the Semiconductors have been a big part of technology leadership over the past decade. And the recent rally has helped for a cupping pattern.
This ratio is now testing its 2000 highs. And a breakout here would be very bullish for the Semiconductors. A breakout here may also keep the Nasdaq out of harms way. This is a big test. Stay tuned!
Semiconductors versus S&P 500 Ratio “monthly” Chart
Note that KimbleCharting is offering a 2 week Free trial to See It Market readers. Just send me an email to email@example.com for details to get set up.
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.