Can you explain why SOX performance has such significant impact on the tech stocks overall? (March 29, 2001)
The chips, as a group, have been showing the best patterns for the past three months. They are not stellar patterns, but they continue to recover and form up again after each setback. They do this because they have historically been a leadership group. Moreover, the chips (other than the telecom chips, e.g., AMCC, BRCM) have actually been rising this year while other tech sectors have been falling. In what is widely believed to be a technology wipeout, the chips have shown remarkable relative strength. Their patterns are the best, and if they can break out of their ranges, they can lead the techs considerably higher.
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