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One of the most important industry groups that any trader or investor can follow is the semiconductor sector. This sector has usually led the NASDAQ Composite higher and lower throughout the years. Whenever the semiconductor sector has declined it has often been a precursor for a major NASDAQ correction. On the flip side, whenever the semiconductor sector has rallied and led the markets higher the NASDAQ Composite will generally experience nothing more than a minor pullback. While most traders and investors will follow the market leading stocks such as Google Inc (GOOG), Apple Inc (AAPL), Amazon .com Inc (AMZN), and Netflix Inc (NFLX), it is the semiconductors that are the real leadership group in the NASDAQ Composite.
At this time, the semiconductor sector is still holding up relatively well on the charts. The Market Vectors Semiconductor ETF (SMH) remains above the important 50 and 200-day moving averages. This tells us that the trend remains up for the industry group, so there are no real problems with this important sector yet. Should the semiconductor sector begin to come under some distribution or selling pressure then the picture for the NASDAQ Composite could change very quickly.
Some of the leading semiconductor stocks that traders should follow include Sandisk Corp (SNDK), Intel Corp (INTC), Broadcom Corp (BRCM), and QUALCOMM Incorporated (QCOM). Traders that want to follow the entire sector can follow the Market Vectors Semiconductor ETF (SMH), or the PHLX Semiconductor Index. Remember, when the semiconductor starts to break down it is a very troublesome sign for the technology industry as a whole.