Don't Ignore This Chart!

One Semiconductor Equipment Stock Stands Out


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,

Book: Define the Trend and Trade the Trend
Twitter: Follow @ArthurHill

Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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