***************
This is a review of some daily charts of the technology sector. I reviewed on Saturday the S&P 500 and US Dollar to see what the status was of the USA equities and currency. In that review, I concluded the S&P 500 is in an intermediate-term bull market and in a long-term bull market. I also concluded the US Dollar was in an intermediate-term bull market and a long-term bull market.
This technology review will include ETFs XLK and SMH plus one stock, CRM, since I already have reviewed the popular stocks Apple (AAPL) and Google (GOOG) on Thursday. There are many more technology ETFs and stocks, of course, than I will review here. Long-term I am bullish personally on technology and the ETFs and stocks listed below. Obviously the future is technology and various forecasts show a solid demand in 2010 for software and hardward. I do my best to keep up with all the latest news and research. I microblog some technology information on Twitter at @OspreyFlyer. A summary is at the end of this post.
XLK: Technology ETF
Noteworthy Closing Prices
Current 22.79 3-19-10 (Third highest yellow line)
2010 YTD High 23.27 1-4-10 (Highest yellow horizontal line)
YE 12-31-09 22.93 (Second highest yellow horizontal line)
10 Month EMA 21.00 (Lowest yellow horizontal line)
Overview XLK is up +0.18% for the week, up +5.07% for the month, down -0.61% for the year, and up +72.39% since the March 9, 2009 market bottom. The XLK is a general technology ETF designed to represent the technology sector of the S&P 500, which is approximately 22% of the S&P 500. This ETF also includes the S&P telecommunications sector, which is merged into this technology sector. See the XLK Technology portfolio holdings here. Apple comprises 8.90% and Google 5.98% of the XLK, a total of 14.88% of the holdings. This is a very liquid ETF.
Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for the XLK on Thursday, March 18. That is, the 25d sma is greater than the 50d sma. A bear market signal had been in effect since February 5, 2010 the first such signal since the February 11, 2009 through April 2, 2009 signal. What a bull run!
Resistance and Support The current closing price, the third highest yellow horizontal line, is in the sideways channel trading of January 2010, which is recent resistance. Above this resistance are the 12-31-09 YE close and the 2010 highs. XLK is also trading in parts of the August and September 2008 trading range.
Moving Averages The 25d sma stopped descending on February 26 and bounced up. The 50d sma continues to gradually descend while the 100d and 200d sma's continue to ascend. The 25d sma has regained the 50d and 100d sma's. XLK regained the 100d sma on March 1 and the 50d sma on March 4.
Uptrend Line The uptrend line, a rate of price ascent, is from the March 9. 2009 closing low of 13.22 up through the February 4, 2010 closing low of 20.86. The February 4 closing low has been the bottom for this 2010 pullback to date. The XLK has remained easily above this trendline since bouncing up above on February 5.
Downtrend Line The downtrend line, a rate of price descent, is from the October 31, 2007 all-time closing high of 28.40 down through the January 4, 2010 closing high of 23.27, the peak YTD closing high so far. XLK has been testing this downtrend line since March 12.
RSI 10 day = 74.49 is overbought; has dropped from high 90s due to recent consolidation
RSI 25 day = 75.43 is overbought, has dropped from low 80s due to recent consolidation
The expected pullback and/or consolidation did occur, to reduce RSIs. More short-term consolidation is likely before any major surge upwards.
MACD (12,26,9) The MACD is bullish and has been since February 16.
Long-Term Trend The lowest yellow horizontal line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The XLK is above this signal at the current close, the third lowest yellow horizontal line.
Conclusion The XLK has now had a decent rally off the low of February 4. However, the current price is still below the 12-31-09 YE close and January 4, 2010 YTD closing high. XLK did regain the 12-31-09 close on March 17 and 18, but then fell back below on March 19. The RSI 10 day and 25 day are signalling overbought conditions, so continuing short-term consolidation is likely. I believe XLK will ultimately break through upside to new 2010 highs, just not sure how long this will take. The intermediate-term trend is now bullish. The long-term trend remains bullish.
SMH: Semiconductors ETF
Noteworthy Closing Prices
Current 27.49 (Third highest yellow horizontal line)
2010 YTD High 28.52 1-8-10 (Highest yellow horizontal line)
YE 12-31-09 27.92 (Second highest yellow horizontal line)
10 Month EMA 25.32 (Lowest yellow horizontal line)
Overview SMH is up +1.78% for the week, up +4.21% for the month, down -1.54% for the year, and up +72.78% since the March 9, 2009 market bottom. The SMH is a technology ETF designed to represent companies that develop, manufacture, and market integrated circuitry and other products known as semiconductors. Of course, semiconductors are integral to the technology sector and to the global economy. Semiconductors demand can be seen as a global economic indicator. See the SMH Semiconductors portfolio holdings here. This ETF is heavily weighted to INTC, TXN, and AMAT, which comprise approximately 55+% of the total portfolio. This is a very liquid ETF.
Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for the SMH on Wednesday, March 17. That is, the 25d sma is greater than the 50d sma. A bear market signal had been in effect since February 5, 2010, the second such signal since the consolidation trading from late 2008 into Q1 2009.
Resistance and Support The current closing price, the third highest yellow horizontal line, is below the December 2009 highs, the YE 12-31-09 close, and in the sideways trading range of mid January 2010. SMH did regain the YE 12-31-09 close for one day, March 17. This is recent resistance. Above this resistance is yet more resistance and ultimately the 28.00+ price area, the 2010 highs, the highest yellow horizontal line.
Moving Averages The 25d sma bottomed on February 26 and began ascending. The 50d sma is slightly descending. The 100d and 200d sma's are ascending. The 25d sma has regained the 50d and 100d sma's. SMH has regained the 100d and 50d sma's.
Uptrend Line The uptrend line, a rate of price ascent, is from the February 23, 2009 closing low of 15.66 up through the February 4, 2010 closing low of 24.51. The February 4 closing low has been the bottom for this 2010 pullback to date. The SMH has easily remained above this trendline since bouncing up above on February 5.
Downtrend Line The yellow downtrend line, a rate of price descent, is from the July 19, 2007 high of 40.42 down through the January 8, 2010 high of 28.52, the peak YTD closing high so far. SMH has began testing this trend line in the last few days.
Relative Strength Index (RSI)
RSI 10 day = 57.42 is reasonable; has dropped from mid 90s earlier in 2010 due to month long trading range
RSI 25 day = 62.43 is reasonable; peaked at high 60s recently
The month long consolidation from mid February through mid March has kept RSIs reasonable. SMH is ready to surge upwards.
MACD (12,26,9) The MACD is bullish and has been since February 11.
Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The SMH is above this signal at the current close, the third highest yellow horizontal line.
Conclusion The SMH has now had a decent rally off the lows of February 4. However, the current price is still below the December 2009 closing highs, 12-31-09 YE close, and the January 2010 closing highs. The RSI 10 day and 25 day are not signalling overbought conditions, so a significant pullback does not appear imminent. Additional sideways, consolidation trading may occur, however, an upwards surge is now likely. The intermediate-term trend is now bullish. The long-term trend remains bullish.
CRM (Salesforce.com Inc.)
Noteworthy Closing Prices
Current 76.02 3-19-10 (Second highest yellow horizontal line)
2010 YTD High 76.91 3-18-10 (Highest yellow horizontal line)
YE 12-31-09 73.77 (Third highest yellow horizontal line)
10 Month EMA 61.28 (Lowest yellow horizontal line)
Overview CRM is up +0.41% for the week, up +11.88% for the month, up +3.05% for the year, and up +146.10% since the March 9, 2009 market bottom. A strong bull run! As with Apple (AAPL), CRM has been setting all-time closing highs recently, the peak at 76.91 on March 17. CRM is a cloud computing pioneer company.2009.
Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for CRM on March 12. That is, the 25d sma is greater than the 50d sma. A bear market signal had been in effect since February 9, 2010, the first such signal since June and July 2009.
Resistance and Support The current closing price, the second highest yellow horizontal line, is above all resistance except the previous day's all-time closing high! Key support is the January 4, 2010 YTD closing high of 74.82, along with the March 12 and 15 closing prices. Additional strong support is below at the YE 12-31-09 close of 73.77.
Moving Averages The 25d sma bottomed on February 17, leveled off, and began ascending on February 26. The 25d, 50d, 100d, and 200d sma's are all ascending.
Uptrend Line The uptrend line, a rate of price ascent, is from the November 19, 2008 closing low of 21.96 up through the February 5, 2010 closing low of 62.08. The February 5 closing low has been the bottom for this 2010 pullback to date. CRM bounced up above the YTD low on February 9 and has easily remained above uptrend line.
Downtrend Line There is no downtrend line, a rate of price descent, because CRM is at all-time closing highs.
RSI 10 day = 82.58 is very overbought; has dropped from high 90s
RSI 25 day = 74.04 is overbought; has dropped from 80-81
CRM has had a record settiing bull run to all-time highs. Expect a pullback and/or consolidation short-term, before another surge upwards in 2010.
MACD (12,26,9) The MACD is bullish and has been since February 11.
Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. CRM is well above this signal at the current close, the second highest yellow horizontal line.
Conclusion CRM has rallied Big Time above the February 5 YTD closing low, which has been lowest closing during the 2010 pullback. The current price is at just below the all-time high. The RSIs indicate CRM is way overbought. Expect a short-term pullback and/or consolidation, before any further surge upwards in 2010. The intermediate-term trend became bullish on Friday, March 12. The long-term trend remains bullish.
Summary
I am personally long-term bullish on the two ETFs, XLK and SMH, and one stock, CRM, reviewed above. However, both XLK and SMH have underperformed the overall USA equities market lately. That is, both have been unable to set new 2010 YTD highs even as the Russell 2000, NASDAQ Composite, NASDAQ 100, S&P 500, and Dow Jones Industrial Average 30 have recently. I noted this in a post last week. On the bright side, CRM has not only reached new YTD 2010 highs, but also all-time highs.
Technology 4Q 2009 earnings reports have been good and the 2010 outlook and guidance is very positive.
I have been unable to discover any other technology ETFs that have decent volume, preferably averaging 1 million shares traded daily. I'd now settle for 500 thousand average daily volume, if you know of any?
Matrix Markets & Friends
Where to Find Matrix Markets & Friends on the Internet:
http://mountainvision.blogspot.com/
I microblog on Twitter:
@MatrixMarkets
Related to this blog, plus additional news about S&P 500, US Dollar, some Technology, and any trades we make.
@OspreyFlyer
Technology stocks and news
***************
No comments:
Post a Comment