The Semiconductor SPDR (XSD) broke out to new highs last week and hit another new high on Tuesday. Despite strength in this broad-based semiconductor ETF, there are still pockets of weakness within the group.
Namely, the semiconductor equipment stocks have been weak in 2018. These include Applied Materials (AMAT), Lam Research (LRCX) and Teradyne (TER). One semiconductor equipment stock, however, is bucking the selling pressure and should be on our radar.
The chart below shows year-to-date price bars for KLA-Tencor (KLAC). Price action has been choppy most of the year, but there is still an upward drift because the 50-day EMA (green) has been above the 200-day EMA (red) the entire year.
Price-wise, a consolidation formed and this consolidation narrowed into July as a large triangle took shape. The stock broke out of this pattern with a gap-surge on July 31st and this breakout is largely holding. There was a pretty hard throwback into the gap zone, but the gap-breakout zone held as the stock moved higher last week.
The indicator window shows year-to-date performance for KLAC and three other semiconductor equipment stocks. KLAC is up around 15% year-to-date, but the other three are in negative territory. Applied Materials (AMAT) is the biggest laggard with a 16% year-to-date loss.
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Topics for Tuesday, September 4th:
- XLF Cup is Half Full (plus KIE and KRE)
- TLT Correlations with XLF, KRE, XLU and IYR
- TLT Backs off Resistance (plus IEF, $TNX, $TYX)
- Oil Extends Uptrend (plus XLE, XES, XOP)
- European Indexes Weaken
- Q&A: Unadjusted TLT, Trading Breakouts, USO vs $WTIC
- Charts to Watch: IWM, ITB, XLC, BAC, FITB, JPM
Plan Your Trade and Trade Your Plan.
- Arthur Hill, CMT
Senior Technical Analyst, StockCharts.com