__________
Back in early February, I discussed how severely extended I thought ATML was. To support my argument, I presented the monthly chart (seen above), illustrating that price had been residing outside of the upper monthly Bollinger Band for several consecutive months. Indeed, this is a fairly rare occurrence, and reeks of imminent mean reversion. Of course, the next day ATML reported earnings and the stock spiked much higher, rendering my analysis completely inconsequential or worse yet, damaging. Although I had no position, the lesson was reinforced that earnings often trump technical analysis, particularly from a swing trading perspective.
Fast forward to the present, and ATML, along with the semiconductors in general, are suddenly the notable laggards in the market. A look at an updated monthly chart shows a shooting star candle to end February, followed by heavy volume downside confirmation in March. Although it seems a bit extreme, a test of the “middle” Bollinger Band (the 20 period monthly moving average–orange line), is a distinct possibility. Indeed, semis and most of the technology sector seem to no longer have the wind at their backs, despite the broad market acting constructively, and many other sectors and issues set up well.
__________
__________
If you enjoy the content at iBankCoin, please follow us on Twitter
Chess: What do think is a meaningful downside support to $SOX. It has been very week in the past week.
380 on SOX I think
Hard to believe there is any downside when the rest are melting upward. I do see it hitting against the downward trendline from Feb. We’ll see.
I would debate the idea that they are melting up. I think they are seeing an oversold pop off of the NSM TXN news.