Breaking down the bull vs. bear case for chip stocks

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Breaking down the bull vs. bear case for chip stocks

posting its largest one-day gain since late 2022, closing up 2.30%. According to the financial newsletter Sevens Report, the upsurge was driven by easing recession fears and stabilizing currency and derivatives markets.

Semiconductor stocks, one of the key drivers of the current bull market, also came under pressure amidst the recent pullback. This week, it has been testing three crucial technical levels around 4,275, including the year-to-date intraday lows, the 200-day moving average, and the uptrend line dating back to the October 2022 lows, which notably intersects with the October 2023 pullback lows.

The daily Relative Strength Index is negative but not yet oversold, indicating there could still be room for further declines, while the weekly RSI turning negative suggests sellers are gaining control of the market.

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