We occasionally publish excerpts from our premium research in an effort to stay on the radar of those who have expressed interest in Asbury Research.

Back on May 31st we published a research excerpt entitled Watch Semiconductors For Leadership This Summer.  Now that summer’s over, this is a good time to revisit that report.

In that My 31st research excerpt we pointed out that the PHLX Semiconductor (SOX) Index had just edged above a major overhead resistance level and said it signaled an intermediate term bullish breakout in this market leading index.  We said that a sustained rise above 693 in the SOX would be seen as a coincident or leading indication of a similar positive move in the US broad market.

Moreover, since semiconductors tend to lead the US broad market both higher and lower, we suggested buying semiconductors as a means to outperform the S&P 500 over the summer.

Since then, the SOX has risen by 15.2% to 699 while the benchmark S&P 500 has risen by just 2.2% to 2143.

The chart below shows this recent relative outperformance from am ETF standpoint.  The blue line in the upper panel plots the daily relative performance of the SPDR S&P Semiconductor ETF (XSD, StateStreet’s version of the SOX Index) versus the SPDR S&P 500 (SPY) daily since January, with a corresponding bar chart of XSD in the lower panel.

Relative Performance: Semiconductors vs. The S&P 500 since January
Relative Performance: Semiconductors vs. The S&P 500

The green highlights show that XSD has outperformed SPY by 11% during that same May 31st to September 19th period.

One important thing to remember, though — semiconductors tend to outperform during broad market rallies, but also underperform during broad market declines — so the knife cuts both waysBeing overweight semis during a downturn can be just as destructive to your portfolio as being overweight them has been beneficial to our subscribers’ portfolios over the summer.

Asbury Research subscribers can view our current analysis on semiconductors and the overall US stock market, including our latest individual stock picks, by logging into our Research Center.

Interested investors can request more information about us, including services, pricing and sample research, by completing our Contact Us page or by calling 888-960-0005.

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