The Semiconductor index made a bearish engulfing candle after making a new high a couple days ago.
I shot first and didn’t ask questions, selling the Semi’s and in particular Silicon Motion (below) on the drop below former support (now resistance) and now going to long SIMO again with the 50 day moving averages as a tolerance line.
Semiconductor stocks took a hit across the board the other day and I don’t mind admitting to you that the big red bearish engulfing candle on the SOX concerned me. It had another day of follow through yesterday, so its implied damage need not continue as an engulfing candle is just a very short term thing.
That is not to say SOX will remain bullish (though we are still on the 10 year breakout), but it is to say that the engulfing candle is in the past.
