NEW YORK (TheStreet) -- The PHLX Semiconductor Index is up 22% for the year to date, outperforming all five major equity averages. This is an important economic indicator as semiconductors are found in almost every product from major appliances and motor vehicles to the smallest electronic devices. Demand for chips equates to demand for the products that contain them.
The six stocks in the SOX profiled in this post have outperformed the index by considerable margins; Applied Materials (AMAT) up 29%, Avago Tech (AVGO) up 66%, Intel (INTC) up 35%, Lam Research (LRCX) up 32%, Micron Tech MU up 51% and Skyworks Solutions (SWKS) up 97%.
Before I profile for these six stocks let's look at the weekly chart for the SOX.
Courtesy of MetaStock Xenith
The weekly chart for the SOX (651.24) is positive with its five-week modified moving average at 632.71 and the 200-week simple moving average at 449.78.
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The momentum run for the SOX began when the index popped above its 200-week SMA at 359.05 on November 23, 2012. Going back to before the "Crash of 2008" the SOX peaked early at 559.60 in June 2006 which was a sign of pending economic weakness. The cycle low was 167.55 set in November 2008 which was an early sign of pending economic strength. The multiyear intraday high for this cycle is 652.28 set on July 16 for a 289% gain from the low. The SOX is 17% above its January 2006 high which is downside risk of 14%. The risk to the November 2008 low is 74%.
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The price pattern since July 4 is a potential double-top if the stocks profiled today fail to provide additional upward momentum.