Semiconductor ETF Has Failed to Break Out
One of the biggest stories in the last month has been the breakout in the 
Nasdaq-100. But the Market Vectors Semiconductor ETF has failed to join the breakout.
It’s not a surprise because chips are economically sensitive and struggle when manufacturing slows. That’s happened now.
SMH’s lack of breakout shows weak relative strength and fundamentals. That could give bears more of a reason to expect downside if selling spreads in the broader market.
It also creates a potential risk-management zone for traders taking bearish positions.
Finally, the relative weakness in chips focuses attention on Nasdaq stocks that have actually broken out – like
software and 
e-commerce. Traders may want to expect more strength in those groups.
SMH might not be a short yet, and it might still break out if the S&P 500 holds 3,000. But if the opposite happens and volatility picks back up in July, this could be a corner of technology where the bears will be more active.
Nasdaq-100. But the Market Vectors Semiconductor ETF has failed to join the breakout. It’s not a surprise because chips are economically sensitive and struggle when manufacturing slows. That’s happened now.
SMH’s lack of breakout shows weak relative strength and fundamentals. That could give bears more of a reason to expect downside if selling spreads in the broader market.
It also creates a potential risk-management zone for traders taking bearish positions.
Finally, the relative weakness in chips focuses attention on Nasdaq stocks that have actually broken out – like
software and e-commerce. Traders may want to expect more strength in those groups.SMH might not be a short yet, and it might still break out if the S&P 500 holds 3,000. But if the opposite happens and volatility picks back up in July, this could be a corner of technology where the bears will be more active.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.