Buy Semiconductor ETFs 2025 breakout Semiconductor ETF breaking out of the triangle, also bounced of the 200-day moving average
SMH trade ideas
Opening (IRA): SMH February 21st 200/225/270/295 Iron Condor... for a 5.44 credit.
Comments: At 42 DTE, selling premium in the semiconductor exchange-traded fund here with a neutral assumption ... . Using wings that are 1/10th of the price of the underlying in width.
Metrics:
Max Profit: 5.44
Buying Power Effect: 19.56
ROC at Max: 27.8%
50% Max: 2.67
ROC at 50% Max: 13.9%
Will generally look to take profit at 50% max; roll in untested side on side test.
SMH - What if this Medianline-Set holds evidence?The upward momentum changed when price closed and opened below the white L-MLH.
The rules say, that when price is leaving the Fork, open and close outside, we can expect a test/retest at the L-MLH.
This is exactly what happened.
Shorts got squeezed by a GAPer of the Market Makers move. And I admit, I could imagine a further rise for a third test at the L-MLH.
However, SMH is being observed very closely from now on.
SMH is bullish above 263SMH seems to be in a upward trend after hold the 200 and 50 SMAs as support. This ETF has been consolidating since July 2024 and if the market is truly going to hold this trend, best believe semis will not be left behind.
Some resistance may occur around 270(closing this gap)but clearing that can push to 280ish ATHs.
$SMHGetting very coiled back in the old triangle after a break out and very steep, harsh retest after a failed breakout. We held the bottom of the triangle and seem primed to launch of the vwap/volume. If we can springboard back out of the triangle there is an old volume gap from ~$262-272, right above early january highs. a $20 point move could happen quickly
SMH @ 200 Day SMAAs we have always said Semis are the new transports. SMH hit the 200 Day SMA on the daily chart. It has been forming a symmetrical wedge pattern. It has an equal opportunity to break out towards upside or downside. The RSI has been oscillating between 60 and 40 since Nov 2024. Watchout the SMH chart to confirm if stock market bull market is intact.
Opening (IRA): SMH February 21st 195/220/270/295 Iron Condor... for a 3.91 credit.
Comments: Back into the semiconductor ETF, where I don't have a position on currently. Going comparatively low delta, with the short options camped out at the 17 delta on both sides and the wings about 1/10th the price of the underlying in width.
Metrics:
Max Profit: 3.91
Buying Power Effect: 21.09
ROC at Max: 18.54%
50% Max: 1.96
ROC at 50% Max: 9.27%
Will generally look to take profit at 50% max, roll untested side in toward current price on side test.
Daily dose of Chart :Intrasector rotation with Tech. SMH vs HACKEven if the XLK (Tech sector ETF) hitting all time highs. But within the sector we see major rotation from Semis to Software to Cyber security. Last 6 months the Semis underperformed the Cybersecurity sector. But this has flipped recently on the daily basis. There is a bullish head and shoulders pattern forming on the SMH / HACK.
CHIP SECTOR TO CRASH SMH The chart posted is the SMH we are now in the final 5th wave and it is a classic 5th wave Diagonal in the 5th wave wave to form a double top into fib cycle peak .From here we should see a major break down in All chip stocks into Oct 2025 but we should see the first leg down low march 10/20th 2025 this should be a Very Bearish action world wide see spy and qqq as well . This is the warning to All traders EXIT INTO RALLIES THE BEST OF TRADES WAVETIMER
Semis: a decisive week for sure!The fate of the market in Q1 is probably in the hands of the Semis and this weekly chart tells me that while indecision is still in the air, we are most likely going to have a breakout upwards.
Price is squeezed in this VCP chart also by the AVWAPs. I have to say it's a beautiful setup.
I am loaded with SMH LEAPS so I can only hope I am right. Also ready to pull the plug if Jensen at CES is just a sell the news event.
SMH / IGV : Semis vs Software on a monthly basisSeems price have memory. This 22 years chart of SMH vs IGV shows failed breakout of Semis vs IGV on a monthly basis plotted over 22 years. Will it breakout this time around after a 22 years base building ? Can NVDIA and AVGO help ?
SMH vs SPYCan S&P 500 have a bullish run with semis not participating in it ? Bullish head and shoulders on SMH vs SPY. Semis are the new Transports.
SMH Roadmap Dec 2024Semis have still upside i think into Spring. This structure is similar to 2000 topping pattern in SPX
SMH | SHORTNASDAQ:SMH
VanEck Semiconductor ETF (SMH) Weekly Analysis:
Current Price Action:
SMH is trading at $218.43, down 9.10% for the week.
Price has breached the upward trendline support, indicating potential further downside.
Key Levels:
Bearish Line: $214.18
Target Price 1: $199.15
Target Price 2: $172.35
Target Price 3: $155.65
Target Price 4: $136.10
Support Zones:
Immediate support is expected around $199.15.
Further support levels are $172.35, $155.65, and $136.10.
Resistance Levels:
Resistance is at the broken trendline near $240, followed by the recent high around $300.
Relative Strength Index (RSI):
RSI is at 53.98, trending downwards, suggesting weakening momentum.
Volume:
Volume is significant at 75.462M, indicating strong selling pressure.
Conclusion:
SMH's breakdown below key support levels and significant bearish momentum suggest further downside potential. Watch for reactions around $199.15 and $172.35 for potential entry points or further declines.
Opening (IRA): SMH January 17th 235 Covered Call... for a 230.52 debit.
Comments: Mostly in this to attempt to grab the annual divvy ... . Last year, it was 1.04/share, but it has been widely variant from year to year (e.g., 2.40 in 2022; 1.57 in 2021; 1.50 in 2020). Selling the -75 delta call against stock to emulate the delta metrics of a 25 delta short put, but with built-in short call defense.
Metrics:
Buying Power Effect/Break Even: 230.52/Share
Max Profit: 4.48
ROC at Max: 1.94%
50% Max: 2.24
ROC at 50% Max: .97%
Will generally look to take profit at 50% max, but may take profit early if the dividend turns out to be non-chump change.
Opening (IRA): SMH January 17th 130/225 Short Put Vertical... for a 3.40 credit.
Comments: Adding to my SMH position on weakness, but using a setup with a lower buying power effect (BPE).
Here, I'm selling the 25 delta put and buying the put that is at a strike that is approximately one half the value of the short put strike to bring in the buying power effect by about half over going with a naked short put. The standalone 225 would cost about 221.54 to put on versus the 91.60 in buying power for this trade, with a resulting bump in ROC as a function of BPE.
Metrics:
Buying Power Effect: 91.60
Break Even: 221.60/share
Max Profit: 3.40
ROC at Max: 3.71% (versus 1.53% for the naked)
50% Max: 1.70
ROC at 50% Max: 1.86% (versus .77% for the naked)
Naturally, the warts on this setup is that I remain subject to assignment risk at the 225 strike, so need to keep that in mind as I put on trades, since BP will have to be free in order to accept assignment of a one lot at 225.
$SMH can 200DMA provide support again?NASDAQ:SMH is checked back to 200DMA today. 200DMA has been a reliable support for the past 4 times since Oct 2023.
Can it do it again?
If SMH gets a bounce, it will lift NASDAQ:AMD , NASDAQ:MU and $NVDA. 👀
Red Flag in Tech: SMH vs. QQQ Breakdown Signals Potential Introduction:
Despite the bullish seasonality currently supporting the market, a concerning signal is emerging from a key driver of this stock market rally: the ratio between semiconductors NASDAQ:SMH and the Nasdaq 100 NASDAQ:QQQ . This ratio serves as a critical gauge of tech sector health, as the major tech and AI players fueling this bull market rely heavily on semiconductor innovation.
Analysis:
Tech Sector Health: The SMH-to-QQQ ratio has historically been a strong indicator of tech sector momentum. When semiconductors outperform, it signals strength and optimism in the broader tech sector. Conversely, underperformance by chip stocks raises concerns about the sustainability of tech-driven rallies.
Emerging Concern: Currently, this ratio appears to be breaking down from a rounding top formation—a bearish signal. If this trend persists, it could lead to increased market volatility, potentially as early as year-end or into early 2025.
Market Implications: For the bull market to maintain its momentum, this ratio needs to reverse course soon. Semiconductors are not just another tech subsector—they are foundational to the AI and big tech themes driving this rally. A continued breakdown could dampen market sentiment, impacting broader indices.
Conclusion:
The SMH-to-QQQ ratio is flashing a warning signal, with a potential breakdown that could lead to increased volatility in the near term. However, chip stocks still have time to recover and restore market confidence. This ratio will be a crucial indicator to watch as we approach the end of the year. Will chip stocks regain their footing, or are we headed for a turbulent 2025? Share your insights below!
Charts: (Include relevant charts showing the SMH-to-QQQ ratio, the rounding top formation, and support and resistance levels)
Tags: #Semiconductors #Nasdaq #TechSector #SMH #QQQ #MarketTrends #TechnicalAnalysis
Opening (IRA): SMH December 20th 225 Covered Call... for a 221.96 debit.
Comments: Selling the -85 call against stock to emulate the delta metrics of a 15 delta short put with the built-in defense of the short call.
Here, primarily just looking to capture the next little increment of up move I missed out on with my 220 covered call.
Metrics:
Buying Power Effect/Break Even: 221.96
Max Profit: 3.04
ROC at Max: 1.37%
50% Max: 1.52
ROC at 50% Max: .69%
Short Semiconductors on Falling DemandThe semiconductor ETF NASDAQ:SMH is currently trading at an all time high because of the belief that there will be increased demand for semiconductors arising from the applications of generative AI. However, on a fundamental level, semiconductor revenue has been dropping for the past five consecutive quarters ( Omdia ). In fact, in the first quarter of 2023 alone, semiconductor revenue dropped 9% from the previous quarter ( Omdia ).
As I see it right now, here are some
positive points for semiconductor companies:
Generative AI has increased demand for semiconductors
Cryptocurrency prices are high, increasing demand for semiconductors
and some negative points for semiconductor companies:
Overextended from Moving Average 300
Generally declining demand
Decreased consumer demand for gaming PCs as Economy heads into recession (since gaming PCs are a luxury good)
US Semiconductor Equipment is being used in China, increasing supply and therefore decreasing price for semiconductors.
Burry entered a large put position on SOXL, and NVDA put premium is currently extremely high
Overall, I am bearish on semiconductors because I think the AI argument is priced in excessively considering the previously dropping demand, and have purchased puts to profit off a potential fall in the value of semiconductor companies.
Tech on the Edge: SMH vs. QQQ Signals Caution Amid Bull MarketIntroduction:
While we remain enthusiastic about the strength of the current bull market, emerging signs of stress in capital flows warrant a closer look, particularly in the tech sector. One key metric to monitor is the ratio between semiconductors (SMH) and the Nasdaq 100 (QQQ). This ratio acts as a barometer for tech sector health: when SMH outperforms QQQ, it indicates a risk-on environment; conversely, QQQ outperforming SMH raises caution flags.
Analysis:
Tech Sector Barometer: The SMH-to-QQQ ratio has historically been a reliable indicator of momentum in the tech sector. Outperformance by SMH reflects strong demand for semiconductors and broader tech health, while underperformance signals potential concerns.
Emerging Concern: Currently, we’re observing the potential development of a rounding top formation in the SMH-to-QQQ ratio. While this formation isn’t confirmed, a breakdown below key support would validate it, signaling broader weakness in the tech sector.
Critical Inflection Point: For now, chip bulls must take control and push this ratio higher to maintain sector strength and prevent a broader pullback in the market. Failure to do so could signal a shift in sentiment and increased vulnerability in tech stocks.
Conclusion:
The SMH-to-QQQ ratio is at a critical juncture, with the potential to dictate near-term momentum in the tech sector. While the bull market remains intact, any confirmed weakness in this ratio could signal broader vulnerability in tech stocks. Will chip bulls step up to defend the sector, or are we on the cusp of a pullback? Share your thoughts below!
Charts: (Include relevant charts showing the SMH-to-QQQ ratio, the potential rounding top formation, and key support levels)
Tags: #Semiconductors #Nasdaq #TechSector #SMH #QQQ #MarketTrends #TechnicalAnalysis
