SMH, the exchange-traded fund that tracks semi-conductors, has moved into overbought territory on the money-flow index. This technical analysis tool uses both price and volume to determine whether buyers or sellers have the greatest interest in a stock or etf.
SMH is in the sixth day of a strengthening macd bull signal, and the price is trading at the top of a range that has held for three trading days., within an area of congestion set last December and at a level touched several times during a sideways move that lasted half of 2009.
If SMH, now trading at $26.88, can break above $27.40 or so, then it has a shot at the $28 or $28.50 resistance levels. Support is between $24.50 and $25. So the downside movement suggested by the mfi has about 7% worth of play. Not too shabby.
More broadly, SMH has been in a downtrend since the first of the year, and began a large retracement of the decline in early February. So I would evaluate the upward movement as countertrend and a downward movement as with the broader trend.
Topics:
Semiconductor HOLDRS.
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