Semiconductors Are Leading the Market

NEW YORK (TheStreet) -- The PHLX Semiconductor Index (^SOX) set a multiyear intraday high at 590.11 on Friday. At Monday's close ($579.85) the index is the year-to-date leader among the indices I follow, up 8.4%.

In addition to the SOX, I have been tracking the 24 semiconductor stocks in the Market Vectors Semiconductor ETF (SMH). Today I re-crunch the numbers for all 24 components compared to the numbers we crunched a month ago in RF Micro Merger-TriQuint Puts Focus on Semiconductor Sector Leadership.

Whether you are bullish or bearish on semiconductor stocks you can use the numbers we crunched in today's table. If you are building long positions, consider adding to longs using GTC (good until cancelled) limit orders to buy weakness to the value levels shown in the table. If you are reducing positions to book profits consider doing so using GTC limit orders to sell strength to risky levels shown in the table.

Analog Devices (ADI) ($53.61 vs. $50.96 on Feb. 24, up 5.2%) still has a positive weekly chart with its five-week modified moving average at $51.41. Based upon our Feb. 25 profile, investors could have bought this stock at $50.24 on March 3 and reduced positions at $52.50 on March 20. Monday's close was on this week's risky level at $53.61 with semiannual, monthly and quarterly levels at $52.50, $52.96 and $53.05.

Altera (ALTR) ($35.76 vs. $35.91 on Feb. 24, down 0.4%) still has a positive but overbought weekly chart with its five-week MMA at $35.23. Quarterly and annual value levels are $32.38 and $31.84 with a monthly pivot at $36.41 and semiannual and weekly risky levels at $37.84 and $38.64.

Applied Materials (AMAT)($20.10 vs. $19.07 on Feb. 24, up 5.4%) now has a positive but overbought weekly chart with its five-week MMA at $19.06. Monthly and quarterly value levels are $19.84 and $17.69 with a weekly risky level at $20.55.

Advanced Micro Devices (AMD) ($4.05 vs. $3.71 on Feb. 24, up 9.2%) now has a positive but overbought with its five-week MMA at $3.86. A monthly value level is $3.15 with a weekly pivot at $4.06 and quarterly risky level at $8.05.

ARM Holdings (ARMH) ($48.48 vs. $49.14 on Feb. 24, down 1.3%) no longer has a positive weekly chart given a close this week below its five-week MMA at $48.52. A weekly value level is $47.87 with semiannual and quarterly risky levels at $49.67 and $51.01.

Atmel (ATML) ($8.49 vs. $8.09 on Feb. 24, up 4.9%) now has a positive weekly chart with its five-week MMA at $8.25. This month's value level is $8.18 with annual risky levels at $8.52 and $10.41.

Avago (AVGO) ($63.16 vs. $59.57 on Feb. 24, up 6%) still has a positive but overbought weekly chart with its five-week MMA at $60.36. A monthly value is $60.25 with semiannual and weekly risky levels at $64.94 and $66.13 vs. Friday's intraday high at $65.83.

Broadcom (BRCM) ($31.60 vs. $30.74 on Feb. 24, up 2.8%) still has a positive weekly chart with its five-week MMA at $30.49. A weekly pivot is $31.79 with a semiannual risky level at $32.12.

Cree (CREE) ($59.70 vs. $61.06 on Feb. 24, down 2.2%) now has a negative weekly chart with its five-week MMA at $60.32. Monthly and annual value levels are $57.93 and $55.64 with a semiannual risky level at $64.80.

Intel (INTC) ($25.12 vs. $24.63 on Feb. 24, up 2%) now has a positive weekly chart with its five-week MMA at $24.84. A quarterly value level is $24.40 with semiannual risky levels at $26.33 and $28.95.

KLA-Tencor (KLAC) ($69.58 vs. $65.35 on Feb. 24, up 6.5% YTD) now has a positive but overbought weekly chart with its five-week MMA at $66.66. A semiannual value level is $65.55.

Linear Tech (LLTC) ($48.26 vs. $46.26 on Feb. 24, up 4.3%) now has a neutral weekly chart with its five-week MMA at $46.82 with declining stochastics. Quarterly and semiannual value levels are $44.89 and $44.21 with a weekly pivot at $48.20 and monthly risky level at $48.94.

LAM Research (LRCX) ($56.40 vs. $52.62 on Feb. 24, up 7.2%) still has a positive weekly chart with its five-week MMA at $53.90. An annual value level is $53.18 with its monthly risky level at $58.32.

Microchip Tech (MCHP) ($47.54 vs. $45.27 on Feb. 24, up 5%) still has a positive weekly chart with its five-week MMA at $46.15. A semiannual value level is $44.04 with a semiannual pivot at $47.05 and monthly risky level at $48.48

Marvell Tech (MRVL) ($15.89 vs. $15.42 on Feb. 24, up 3%) now has a positive weekly chart with its five-week MMA at $15.52. An annual value level is $13.97 with a monthly pivot at $15.56 with weekly and semiannual risky levels at $16.37 and $16.87.

Micron (MU) ($23.48 vs. $24.75 on Feb. 24, down 5.1%) will have a negative weekly chart given a close this week below its five-week MMA at $23.72. A quarterly value level is $18.60 with monthly and weekly risky levels at $24.83 and $25.44.

Maxim Integrated (MXIM) ($32.21 vs. $31.75 on Feb. 24, up 1.5%) still has a positive but overbought weekly chart with its five-week MMA at $31.44. A semiannual value level is $30.92 with a monthly pivot at $31.78 and semiannual risky level at $33.86.

Nvidia (NVDA) ($18.45 vs. $18.91 on Feb. 24, down 2.4%) now has a neutral weekly chart with its five-week MMA at $17.78 and with declining stochastics. Monthly and semiannual value levels are $17.96 and $17.65 with a weekly risky level at $19.94. The semiannual value level was tested on March 14.

On Semiconductor (ONNN) ($9.39 vs. $9.42 on Feb. 24, down 0.3%) still has a positive but overbought weekly chart with its five-week MMA at $9.16. Monthly and quarterly value levels are $7.97 and $7.72 with annual risky levels at $9.98 and $10.37.

Skyworks Solutions (SWKS) ($37.38 vs. $34.40 on Feb. 24, up 8.7%) still has a positive but overbought weekly chart with its five-week MMA at $34.77. Monthly and semiannual value levels are $35.08 and $33.96 with a weekly risky level at $37.97.

Teradyne (TER) ($19.94 vs. $20.19 on Feb. 24, down 1.2%) still has a positive but overbought weekly chart with a five-week MMA at $19.63. Monthly and semiannual value levels are $17.96 and $17.40 with a semiannual pivot at $19.49 and weekly and semiannual risky levels at $20.41 and $20.85.

Taiwan Semiconductor (TSM) ($18.64 vs. $17.69 on Feb. 24, up 5.4%) now has a neutral weekly chart with its five-week MMA at $18.24 and with declining stochastics. Semiannual and annual value levels are $17.92 and $16.25 with a semiannual pivot at $18.62 and a quarterly risky level at $20.33.

Texas Instruments (TXN) ($46.57 vs. $44.45 on Feb. 24, up 4.8% YTD) now has a positive but overbought weekly chart with its five-week MMA at $45.04. Quarterly and semiannual value levels are $41.82 and $41.39 with a monthly pivot at $46.33 and a monthly risky level at $49.37.

Xilinx (XLNX) ($54.50 vs. $51.34 on Feb. 24, up 6.2%) now has a positive but overbought weekly chart with its five-week MMA at $51.55. Quarterly and semiannual value levels are $47.00 and $46.86 with a monthly pivot at $54.51 and a weekly risky level at $55.22.

Crunching the Numbers with Richard Suttmeier

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: (stocks below a moving average listed in Red are below that moving average)

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (even Apple declined to its 200-week SMA in June 2013)

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (even Apple tested or crossed its 200-day SMA in nine of the last 10 years)

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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