When we last looked at exchange traded funds indexed to semiconductor stocks in November, bearish put buyers were present in SOXX (iShares PHLX SOX Semiconductor Sector), and the sector has been a laggard against a relatively strong Nasdaq-100 in 2011.
SOXX has lost 13.01% versus the Nasdaq 100 up 2.39% and the S&P 500 losing 2.10%. Since SOXX options do not typically trade in large size, we found the put buying notable at the time and worthy of a highlight.
Now that we are seeing names in the sector report disappointing earnings and the stocks have subsequently dropped in price, such as TXN and INTC, we believe a revisit of the sector is in order. [Intel Warning Hits Nasdaq ETF]
On Monday, SOXX opened up on a “gap down” lower than its 50 day moving average, and yesterday the sector ETF fell an additional 2.4% on heavy trading volume. Top holdings in the fund are INTC, TXN, AMAT, BRCM, and TSM currently. INTC is also the fifth largest holding in the QQQ (PowerShares Nasdaq 100), with a 4.96% weighting.