ON Semiconductor (US: ON) upside has come to an end when the RSI indicate a bearish divergence on the larger front, which signify a momentum ending signal for wave (5). Further technical has shown further signs of a bearish correction coming.   

1. The failure to reach 161.8% extension target of wave (4) indicate a weakness in momentum especially after a potential double top was formed with yesterday’s candle breaking below the 138.2% extension level of wave (4).
2. Although Ichimoku signals a upside trend, the bearish candle which gap and close below the Tenkan-Sen signify that the bear is coming.
3. RSI have indicate a larger bearish divergence from late July to September and the smaller divergence confirms the potential double top.
4. Going forward, the larger ABC corrective phase will see wave (A) targeting support zone 1 at US$40.87-US$41.87 and wave (C) targeting support zone 2 at US$34.92-US$37.00

*Expected timeline of the trade is 5 weeks from the date of report issuance.

CHART LEGEND

Ichimoku Kinko Hyo

Red dotted line = 26 periods Kijun-Sen

Blue dotted line = 9 Periods Tenkan-Sen

Green Line B= 52 periods Senkou Span B

Pink Line A = 26 periods Senkou Span A

Black line = 26 periods Chikou Span. Lagging line