There is an underlying technical pattern emerging within the chip sector. One of the most crucial component in chip making is the Lithography process and the leading (or perhaps only) company in this sector is ASML. Anyone wanting to understand the background behind this company can watch this CNBC video call Why The World Relies On ASML For Machines That Print Chips.
With that understanding in mind, chip making is a cyclical business with ups and downs and depended heavily in CapEx from companies such as TSMC, Intel, and Samsung. Our chart review today shows a very simple pattern known as Golden Cross which is when the 50 SMA is crossing above 200 SMA. Although it is consider to be a Bullish indicator, not many have back test this logic and provide some statistics behind it. We’ve done just that and the table below shows the detail.
