AMAT, SMH Poised to Move Higher

With the SMH acting well (and the HHH Internet ETF coming back strongly), two important technology sectors are poised to move considerably higher... Within the SMH, let's take a look at AMAT (14% of the SMH)...

For the better part of 2006 the price action in AMAT produced a huge base-like pattern that is nearing completion, and which could trigger a powerful advance during 2007. Today's up-spike off of the July-Jan uptrend (especially the series of higher lows) is approaching a test of critical intermediate-term resistance at 19-20, which if (when) hurdled should unleash a powerful upside follow-through towards a next target of 22.

Only a failure to do so, followed by a decline that breaks 18, will significantly weaken the developing chart pattern.

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