Updating the SOX: Pausing Where You’d Expect, Move Along

In September I took a look at the Philadelphia Semiconductor Index, SOX ($SOXX). Back then I noted that nested Inverse Head and Shoulder patterns could give it a pause or a pullback. And what has happened since then?

sox

Actually both have happened. Notice that the monthly chart had a very quick pullback to the rising 20 month SMA and is now consolidating at the first Head and Shoulders Price objective again, near 660. Not much else has changed with the RSI moving sideways near the overbought level and the MACD leveling. The prospect of more consolidation or a pullback remains, with a fall and close below 600 confirming the pullback case. Until then or a break and hold over 660, there may be better places for your money.

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