The Philadelphia Semiconductor Index (SOX) does not include ADI, but its movement does have an indicative effect on the stock as well as the trend of the Nasdaq.
Currently, the SOX is wavering around the key point at the 487-490 mark. That's exactly where the resistance of the general downward trend of the index is. It's also the key level for the 200day SMA, if that ever matters to anyone.
More importantly, the SOX is also hitting up very very high levels on RSI and Stochastics, and the last time that it's reached these levels, it almost immediately sailed back down to the downward channel support level. The major hits of this year were in Jan and early April. There were also smaller sell-offs in mid-Feb and about two weeks ago. Everytime right before it occured, those common indicators had signaled overbought levels.
Well, those indicators are at play in the charts again.
Anyway, if these indicators are right again and the SOX tanks, guess where ADI is going? I think you already by now.
But I said it's only a key level. If we pop it and breakthrough with tremendous force and convincing volume and strength, then who knows....
ADI has broken its resistance level on relatively light volume. Usually, when ADI moves 2 bucks, it has heavy volume. Anyway, we're back to testing the very sensitive area for the SOX again. If that level breaks through with strength, it's time to put the finger on the trigger for the shorts. I say about 490, and we're just a hairline below that.
Stronger figures came out today, and there's usually a sense of initial euphoria. But when they talk about inflation or interest rates, and they probably will, it will counter this euphoria and drive this speculative process down again. The rest of the world wasn't impressed with the data though. Dollar at a 2-month low.
I prefer to be guided by the trending channels, and they have been tested and not broken yet. You could do that type of analysis or roll some dice... I prefer not to roll the dice.
<<Sounds liek you're another disgruntled shareholder who is looking for some hope in a message board to appease your frustrations>>
BWAHAHAHA! Funny indeed!
I miss them but I won't miss you. -Click!-