KLAC (KLA-Tencor Corp) offers an objective short entry following the breakdown from this bear flag continuation pattern (which follows the larger rising wedge breakdown). Suggested stop above 69.20 with a 63.26 as the sole profit target at this time.
KLAC daily Aug 24th
KLAC is just one of numerous short trade setups that I found in the semiconductor equipment sector while going through the charts last night. I will most likely add additional semi equipment makers as well as some individual semiconductor stocks as trade setups. Therefore, if you plan to engage this sector you should consider leaving room for additional trades within the semiconductor equipment & semiconductor sectors in order to not exceed your target exposure to the group.
It is also worth pointing out that the semiconductor equipment stocks like KLAC & AMAT, which produce the equipment that the semiconductor companies like INTC & TXN use to manufacture semiconductor chips, are widely considered the canary in the coal mine for the semiconductor industry (as when their business slows that is a result of the semiconductor companies cutting back on orders as they see their business likely to slow going forward). Additionally, many view the semiconductor stocks (INTC, TXN, QCOM, MU, LRCX, etc…) as a leading indicator for the tech sector as a whole. Therefore, whether you care to short these stocks or not, it is worth monitoring these potential bearish developments that appear to be forming in the chip equipment makers.