(Click On Chart To Enlarge)
When targets get MADE or come close, that doesn't mean that the stock or index will reverse in the other direction, but often within a few days, that's just what occurs as we can see from the Rectangle target that got MADE on May 19th. That day also was the exact intermediate high in the Semiconductor Index (SOX).
On Friday, October 10, the SOX came within a half a point of achieving the 231.47 target that has been IN PLAY since the September 4 H&S Top breakdown, and the candlestick is a Bullish Doji Star Hammer which, naturally, only is bullish with upside follow-thru.
Bear market rallies notoriously are sharp in terms of both price and time. If Friday's candlestick, indeed, is a Bullish Doji Star hammer, I would expect the SOX to recover a minimum of 50% of the distance between Friday's low and the neckline (horizontal blue line on the chart) in a relatively short period of time. That distance is roughly 100 points, so I would expect to see the SOX at roughly 280 at a minimum, which is 14% higher from here, and quite possibly higher.
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