Tuesday, April 27, 2010

Semiconductor stocks- time for profit-taking

The Philadelphia Semiconductor Index (SOX) has been in an uptrend since November last year. I have drawn an uptrend line (SS) which has supported the SOX in previous bouts of correction. I have also drawn a parallel line (PP) which acted as a resistance to its periodic upswings. While SOX moved within this channel, we can see that the index also moved in short-term cycles lasting 3-4 months. I have denoted cyclical highs as H1, H2, H3, H4 and possibly H5. I have also denoted the cyclical lows as L1, L2, L3 and L4. We may be making a cyclical high soon, which I denoted as H5. After the previous cyclical, H4, the SOX corrected back to the uptrend line (and, cyclical low, L4). This also coincided with a sharp correction for Unisem, Gtronic & MPI back to their respective 50-day SMA line. If the SOX made a cyclical high & entered into a correction, we can expect a similar correction among our semiconductor stocks, especially Unisem & Gtronic. It may be a good idea to sell into strength for these 3 stocks.


Chart: SOX, Unisem, Gtronic & MPI's daily chart as at April 26, 2010 (Source: Stockcharts & Tradesignum).
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9 comments:

  1. cheerTuesday, April 27, 2010 4:51:00 PM

    How abt glove?

    ReplyDelete
  2. MaxWealth88Tuesday, April 27, 2010 4:57:00 PM

    hi alex,

    what is your view on the next 3months? Any recommended stocks?

    thanks
    maxwealth88

    ReplyDelete
  3. Alex LuTuesday, April 27, 2010 5:13:00 PM

    Hi Cheer,

    The rubber glove stocks are all above their uptrend lines. Three of them- Supermax, Adventa & Latexx- are resting on the uptredn line support this moment. The uptrend line support of the main rubber glove makers are:

    Topglove.....RM12.50
    Kossan*......RM7.70
    Harta........RM7.35
    Supermax*....RM6.90
    Latexx.......RM3.80
    Adventa......EM3.40
    (* accelerated uptrend line support)

    ReplyDelete
  4. Alex LuTuesday, April 27, 2010 5:18:00 PM

    Hi MaxWealth88,

    I am trying not to recommend any more stocks for this moment. I feel the market is quite toppish presently. The risk we take now outweigh the reward we may receive. Under such circumstances, it is best to stay light & easy

    ReplyDelete
  5. AnonymousTuesday, April 27, 2010 11:18:00 PM

    Dear Alex

    Do you have investment idea on Crestbld and Protasco. These two construction counter are trading below PE<8x; dividend yield >5%

    ReplyDelete
  6. 仑襁Tuesday, April 27, 2010 11:34:00 PM

    dear alex,

    can comment on GUH?

    thanks

    ReplyDelete
  7. JYWednesday, April 28, 2010 3:54:00 PM

    I have to agree with you, Alex. Another 6 weeks to world cup. Market is beginning to adjust its mood to world cup mood. Better cash out the profit and buy a 50" LED tv. HA~

    ReplyDelete
  8. Alex LuFriday, April 30, 2010 11:21:00 AM

    Hi hng,

    My take on the two stocks are

    1) Crestbld is range-bound between RM0.70-0.85. There is no sign where the move will be.

    2) Protasco is in a gradual uptrend with support at RM1.00. A possible triangle can be seen, with resistance at RM1.07. If it can cross above the RM1.07 level, its uptrend may continue.

    ReplyDelete
  9. Alex LuFriday, April 30, 2010 11:33:00 AM

    Hi 仑襁,

    GUH is in an uptrend that started in March last year. The support of that uptrend line at RM1.05.

    The stock is presently trapped within a triangle with support at RM1.18 and resistance at RM1.26. Its uptrend will continue if it achieved an upside breakout above RM1.26. On the other hand, a downside breakout below RM1.18 could send the stock to the above-mentioned uptrend line (where the support is at RM1.05).

    ReplyDelete