Yesterday afternoon, the leading semiconductor stocks were holding up very well despite the sell-off in the cloud computing stocks. The important and highly followed Market Vectors Semiconductor ETF (SMH) traded higher by 0.03 cents to $34.36 a share. So basically, the majority of the semiconductor stocks were flat. Short term traders should watch for intra-day resistance around the $34.40 a share. The daily chart for the SMH will have important resistance around the $35.50 level.
Most experienced traders and investors will follow the semiconductor sector for several reasons. In the past twenty years, when the semiconductor stocks lead the tech heavy NASDAQ Composite it is a sign of further upside for the tech stocks. The opposite is true when the semiconductor stocks begin to lag the NASDAQ Composite it is often a sign that the tech sector is about to roll over or stage a severe correction.
Some leading semiconductor stocks that traders should follow closely on a daily basis include Broadcom Corp (BRCM), SanDisk Corp (SNDK), Intel Corp (INTC), and Texas Instruments Inc (TXN).