SOX Flashes 17% Pullback Risk After 15 Swings of 3% in 30 Days
Updated
Updated · CNBC · Jul 10
SOX Flashes 17% Pullback Risk After 15 Swings of 3% in 30 Days
1 articles · Updated · CNBC · Jul 10
Summary
BTIG said the Philadelphia Semiconductor Index is sending a technical warning after logging 15 sessions with moves of 3% or more in the past 30 trading days.
Thursday's 3% gain left the SOX above its 50- and 200-day moving averages but below its 20-day average, a pattern BTIG said has preceded drawdowns of 17% or worse in 1995, 1997, 2000, 2020 and 2024.
Recent trading has been unusually violent: the index rose 2% Wednesday, fell 4.7% Tuesday and gained 2% Monday after surging 22% in May and 11% in June; it is still up more than 80% this year despite a 9% July drop.
Jefferies also compared the rally with 2000-era semiconductor runs, noting Russell 2000 chip stocks have jumped 104.4% in three months, though it said average returns after such leaps have still been positive over the next three to six months.
A fresh supply catalyst arrives Friday when SK Hynix starts Nasdaq trading; Morgan Stanley and UBS desks have warned the nearly $30 billion share issuance could pressure the group further.