- Technical Commentary -

December 22, 2009 (FinancialWire) (By Frank Kollar) — Shares for the Semiconductors HOLDRS ETF (NYSE: SMH) reached their pre-bear market highs in 2007, before declining from their $39 high, down to below $15 a share at their bear market lows. Their recovery in 2009 has now reached almost to the 50% retracement level.

Typically the 50% retracement acts as strong resistance and if decisively surpassed, acts as a springboard to the next resistance level at 61.8%. For SMH, the 50% retracement is at $27.93. SMH gapped higher on Monday, December 21 to close at $27.62, just 1% shy of this level.

If SMH can close above $27.93 in coming days, look for a continued rally to $31.11, the 61.8% retracement level, some 12.6% higher.

The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in the Semiconductors HOLDRS.

Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

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