Oil Pulls Back as Semiconductor Rebounds Near Key Resistance

The S&P 500 Index (SPX) is holding within its current range and trading slightly higher as the market approaches a major group of earnings reports. Oil pulling back from its highs is helping relieve some pressure, while semiconductor stocks have recovered after opening sharply lower. Most of these names still have not completed a 50% or 61.8% Fibonacci retracement of their recent declines, so the rebound may still have room to continue.

Alphabet Inc. (GOOGL), International Business Machines Corporation (IBM), ServiceNow, Inc. (NOW), Tesla, Inc. (TSLA), and Texas Instruments Incorporated (TXN) are all reporting after hours. IBM is especially important following its warning, which contributed to a 25% decline in the stock. The Federal Reserve is also in focus next week, with additional commentary likely to influence expectations around interest rates, economic growth, and market risk.

Crude oil, traded through the United States Oil Fund, LP (USO), reached major resistance between $87 and $88 per barrel and is now pulling back. This area previously acted as support, producing several bounces before the price finally broke below it. Once that support failed, it became resistance when oil returned to the same level.

The probabilities favor a pullback from here, although oil could still break higher. The first conservative downside target is between $79 and $78. A larger decline below the former gap fill near $67 would likely require meaningful weakness in the United States economy.

The earlier oil position was opened near the gap fill and closed between $78 and $79 for a gain of more than 10%. The goal is not to capture every exact high and low. The better approach is to take disciplined, repeatable gains while avoiding the added risk that comes from holding out for the entire move.

Now let’s look at the semiconductor group. Seagate Technology Holdings plc (STX) completed a major run from the March 30th market low before pulling back to its 50% Fibonacci retracement. A decline to the 61.8% level was possible, but Seagate’s move was supported by demand, earnings, and revenue, which helped produce a shallower correction.

That 50% retracement also aligned with an earlier pivot and trend line, making it a strong area to close the short position. On the rebound, Seagate has already reached the 50% retracement of its recent decline, but the stronger probability favors a move toward the 61.8% level near $975. That is where a new short position becomes more attractive. A gap fill remains above near $1,025, so the stock could extend higher before the rebound is complete.

Marvell Technology, Inc. (MRVL) experienced a deeper pullback and reached its 61.8% Fibonacci retracement. That level also matched an important support pivot and gap fill, creating a strong area for a long trade and producing a sharp rebound. Marvell’s earlier rally included more speculation, including the idea that it could become the next trillion-dollar company. That made a deeper retracement more reasonable than Seagate’s move. For a potential short, the key rebound area sits between the 50% and 61.8% levels. The better entry is where one of those retracement lines up with established resistance or another important pivot.

SanDisk Corporation (SNDK) did not reach its original downside target before bouncing. The more attractive short area now sits around $1,840, with the possibility of a move toward $1,900.

Gold (XAU/USD) is pressing against major resistance. A confirmed breakout would create a possible swing trade to the upside, beginning with a smaller position. Silver (XAG/USD) is also worth watching, but it still has more work to do before producing the same type of setup.

The key right now is patience. Oil is reacting to major resistance, semiconductor rebounds are moving toward defined Fibonacci levels, and earnings combined with Federal Reserve commentary could increase volatility. Let price reach the planned zones, wait for confirmation, and avoid chasing before the setup is complete.