Profile image
By ETF Daily News (Reporter)
Contributor profile | More stories
Story Views

Last Hour:
Last 24 Hours:

Semiconductors Give A Hint About Where The Wider Markets Are Going

Monday, March 20, 2017 3:09
% of readers think this story is Fact. Add your two cents.

From Taki Tsaklanos: The semiconductor sector is one of the few outperformers since last summer. The breakout that took place last September was visibly in the making for a longer period of time, as seen on the chart, so smart investors saw that coming.

InvestingHaven readers were informed several months ago that this sector would continue to be bullish in the first period of 2017: 4 stock market sectors that could outperform in the first months of 2017. The SOX index, representing the semiconductor stock market sector, rose exactly 30 percent in the last 6 months.

Will this stock market sector continue to rise?

This is an important question, not only because it would suggest whether there is sufficient upside potential to consider a long position. The answer to that question, in our view, is simple: as long as the uptrend (which anyone can create by connecting the lows of the recent uptrend) is still intact, prices are set to rise. We would not encourage anyone to take aggressive positions in this stage.

The more important side of the issue, however, is that the semiconductor stock market sector could be a leading indicator for stock markets as a whole. A failure of the semiconductor sector to rise could have major implications for stock markets. The reason is that the semiconductor sector is an outperformer, hence a leader of the stock market. Typically, the stock market rises along with the outperformers. In other words, investors could watch the outperforming sectors as a leading indicator for the stock market as a whole.

This is a fundamental reason for investors to follow specific stock market sectors, even if they are not invested in it.

This small trick is complementary to what we wrote earlier about leading indicators, see:

Watch This Market As A Leading Indicator For Gold And Stock Markets
Stock Bear Market Looming? Watch These 3 Leading Indicators.
Market Outlook 2017 According To Our Proprietary Indicators

semiconductors stock market

The iShares PHLX Semiconductor ETF (NASDAQ:SOXX) was unchanged in premarket trading Monday. Year-to-date, SOXX has gained 11.10%, versus a 6.04% rise in the benchmark S&P 500 index during the same period.

SOXX currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #11 of 54 ETFs in the Technology Equities ETFs category.

This article is brought to you courtesy of Investing Haven.

You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (


We encourage you to Share our Reports, Analyses, Breaking News and Videos. Simply Click your Favorite Social Media Button and Share.

Report abuse


Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories



Top Global

Top Alternative




Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.