One of the most important stock sectors that any trader can follow is the semi-conductor sector. This important industry group has a tendency to lead the technology stocks higher and lower. Over the years it has become an excellent barometer for the NASDAQ Composite.
Traders and investors can easily follow the semiconductor index by using a chart of the Market Vectors Semiconductor ETF (NYSEARCA:SMH). If you examine this chart you will notice that the SMH is still trading below its important April and May 2012 highs. When the semiconductor sector lags the NASDAQ Composite it can often be a warning sign that the technology sector could be setting up for a decline soon.
Some other leading semiconductor stocks that should be followed closely include Intel Corp (NASDAQ:INTC), QUALCOMM Inc (NASDAQ:QCOM), and Broadcom Corporation (NASDAQ:BRCM). All of these leading semiconductor stocks are lagging the NASDAQ Composite and the NASDAQ 100 Index at this time. This could be telling that these indexes will be coming under selling pressure very soon.
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