Insights 
In early May, the Semiconductor Index (SOX) was at $4430, with expectations to reach $4550-5090, assuming it stayed above $3963. Recently, the index hit $4996 and is now at $4865, marking a 10% increase. This analysis is based on the Elliott Wave Principle, which applies a pattern recognition approach to financial trends over time.
Current projections suggest the SOX could rise to $5150, provided it remains above last week’s low of $4700 and particularly above $4430. This aligns with the completion of specific wave phases and the ongoing wave sequence. The index presently operates within a Cycle-4 wave, characterised in Elliott Wave terms as flat corrections.
Wave Pattern Insights
The wave pattern suggests that SOX could return to the $5000s, potentially reaching $5700, as a flat correction indicates a 3-3-5 structure. In the short term, there’s an expectation for the trend to continue upwards, with targets for the upcoming wave set between $5090 and $5450, contingent on maintaining a position above $4500. Future assessments will focus on these target zones for further trends. The forecast is subject to market behaviours and is not a guarantee of future outcomes.
What we’ve seen unfold so far in the Semiconductor Index (SOX) follows typical Elliott Wave characteristics, particularly with regard to the wave formations within a larger Cycle-4 structure. For those unfamiliar, Cycle-4 within Elliott analysis often contains what’s known as a ‘flat correction’, which is a three-phase retracement — a move that usually consists of two sideways pushes separated by a brief dip. It doesn’t imply randomness, quite the opposite. There’s often a symmetry to it, if the lower thresholds hold.
The recent high of 4996 came remarkably close to the initial upper region of the target zone mentioned at the beginning of May. This move supports the idea that Wave B (within the flat correction) is nearing or has already completed, and with last week’s low resting at 4700, the wave sequence remains intact. The most important numbers now? 4700 first, and then 4430. Should those levels hold, the current movement appears to be caught in an upward push — what we would call Wave C within the flat structure.
Market Strategy and Considerations
Flat corrections typically end with an impulsive five-wave climb. If that’s where we are, then the thrust toward 5150 or even 5450 is not unexpected. Prices are hovering just below 5000 now, and if that continues to act as a pivot near-term, a brief consolidation could occur before another move up begins. However, anything breaking beneath 4500, and especially 4430, would mean a rethink is required.
For derivatives traders, the clearest plans now depend heavily on the reactions around 4700 and 4500. If the SOX dips into that range but rebounds without breaching it, then short-dated positions to the upside could still be justified — provided, of course, the risk is matched to the support levels. The deeper the pullback without violating the structure, the stronger the potential for a clean five-wave rise toward targets in the 5200–5450 region.
Given the nature of Wave C moves, they can accelerate rather quickly, often catching flat-footed moves on either side. Timing instruments around re-tests of recent highs will help refine entry windows. Right now, the rhythm looks orderly — a sign that technical foundations are in place. If, over the next fortnight, the Index remains pressed above 4700, and ideally holds the 4850–4900 area on dips, then the odds widen further in favour of an upside continuation.
We will continue watching the behaviour of the SOX in relation to these levels. Each pullback is more than noise — it defines the eligibility of price to continue.
