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Semiconductor Stock Roller Coaster — Check These Charts

The PHLX Semiconductor Index, known as the SOX, set its multiyear high off 751.21 on June 1, 2015. Since then the SOX has been moving up and down like a roller coaster. It hit a flash crash bottom at 543.03 on Aug. 24.

Four of the 30 components of the SOX will be reporting quarterly results soon.

Nvidia (NVDA - Get Report) is expected to report earnings of 31 cents a share after the closing bell on Thursday.

On May 18, Analog Devices (ADI - Get Report) is expected to report earnings of 62 cents a share before the opening bell.

Applied Materials (AMAT - Get Report) and Marvell Tech (MRVL - Get Report) are expected to report earnings on May 19. Expectations call for earnings of 32 cents and 2 cents a share, respectively.

Given the roller coaster rides for the SOX and for most of its components, this industry provides short-term trading opportunities but risky longer-term investments. This makes the technical charts extremely important road maps to use in setting trading strategies.

Investors should consider short-term trading as attempting to capture a portion of a stock's volatility over a rolling three-to-five-week horizon. This is accomplished by buying on weakness to a key technical level and then selling strength to a higher key level.

Here's today's scorecard for the SOX and the four components charted today.


Here's the daily chart for the SOX.

Courtesy of MetaStock Xenith

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The SOX closed Monday at 636.53, down 4.1% year to date, but up 15.3% from its Feb. 11 low of 552.26. It is down 7.1% since setting its 2016 high of 685.41 on April 13. The SOX is in correction territory, 15.3% below its multiyear high of 751.21, set on June 1, 2015.

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