Hexun Investment Advisor Feng Lushun: On March 16th, where is the semiconductor sector headed next?

On March 16, let’s analyze the semiconductor and storage chip sectors.

First, the semiconductor sector. Today, semiconductors showed a rebound after testing lows, reaching a previous low point and then forming a “golden needle” bottoming pattern. This indicates clear support below and funds entering at low levels. After all, technology is the starting point of a bull market; if tech doesn’t perform, who else can? So, support at this level is reasonable.

Next, observe whether it can hold the support and how it will move afterward. On a larger cycle, semiconductors have retested the 5-week moving average and the May moving average, which is a very positive signal, indicating the larger cycle has bottomed out. After the retest, for the price to rise, the short-term cycle must perform well. What does that mean? It means the price candles should stay above the moving averages, the 5-day moving average should cross above the 10-day moving average (golden cross), and the MACD should turn red. Before this pattern forms, major players might be playing the spread, using dips to accumulate chips. Today’s dip near the previous low, with increased volume and a rebound, is a typical example.

In terms of trading, before the moving average golden cross, you can buy on dips near the 5-month moving average and sell at the 5-day moving average to profit from the spread. Once it breaks above the 5-day moving average, it will challenge the 5-week moving average.

Now, let’s look at storage chips, which are the vanguard of the semiconductor sector and crucial to the entire industry. The larger cycle of storage chips has also retested the May moving average. On the short-term cycle, the 5-day moving average hasn’t yet formed a golden cross, but it is somewhat stronger than the overall semiconductor sector. It has already filled the previous gap, and after filling the gap, attention can be focused on it. Within semiconductors, storage chips remain the key focus. When the moving averages form a golden cross and MACD turns red, a wave of行情 (market movement) is expected. For stock selection, look for stocks with multiple moving averages in a bullish alignment, MACD turning red, and institutional funds entering.

(Author: Zhang Yan)

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