Semiconductors have not been the brightest star in the tech constellation in recent months. Comparing the performance of the HOLDRS Semiconductor ( SMH ) , for example, with that of the broader technology sector (via the Technology Select Sector SPDR Fund ( XLK ) ), shows a sector that continues to trade in bear market territory compared to a general tech sector that appears to have left bear market territory behind for good.
This relative underperformance over the past several weeks is mirrored by more recent sector weakness - including trading in the stock on Monday's sell-off that took the Nasdaq 100 down by more than 1%. On a day when XLK sold off by more than 1% alongside the Nasdaq 100, the SMH dropped by more than 3%.
So with all the selling in the semiconductor sector, is there anywhere in the sector where traders and active investors looking to buy quality weakness can begin to look?
Other than Intel Corp ( INTC ) , which was at yearly highs less than a week ago, semiconductor stocks like Sandisk Corp ( SNDK ) have begun to move lower above the 200-day moving average. Shares of SNDK have dropped for three out of the past five trading days and take a small positive edge of just under half a percent into trading on Tuesday.
Also pulling back in bull market territory after Monday's sell-off are shares of Kla-Tencor Corp ( KLAC ) . The stock pulled back by well over 2% in trading on Monday and has now finished lower for three out of the past four sessions. Compared to SNDK, KLAC has a positive edge of well over half a percent in the short term.
With a positive edge of nearly 1% in the short term, Novellus Systems Inc ( NVLS ) is another semiconductor stock that has come under significant profit-taking in recent days. Shares of NVLS rallied to their highest closing level in months on Friday, and on Monday profit-taking has taken the stock lower by more than 3%.
None of the stocks noted above are yet in technically oversold territory. As such, all four likely will require additional selling before traders on the sidelines are provoked enough by low prices to return to the market as buyers.
All of the stocks in today's report were available from research and data available through The Machine. To learn more, click here .
David Penn is Editor in Chief of TradingMarkets.com