With Nvidia’s earnings last week and the subsequent fallout, investors are drawn once again to the crucial semiconductor sector, central to the AI trade that’s driven markets in recent months.
Are we seeing a potential top in semiconductors and what implications might this have for the broader stock market?
The VanEck Vectors Semiconductor ETF (SMH) reveals possible signs of the infamous head and shoulders pattern, a classic indicator of a market top, which, if confirmed, could suggest a significant shift in market trends.
The performance disparity between semiconductors and broader market indexes since the July peak suggests a weakening in semiconductor momentum. If semiconductors do form a major top, it would likely weigh on the Nasdaq 100 and S&P 500, given their substantial representation in these indexes.
- Are semis forming a head and shoulders top, and what particular levels should investors watch as a result?
- What is the significance of the 200-day moving average in confirming a market shift for semiconductors?
- How might a downturn in semiconductors impact broader market indexes like the Nasdaq 100 and S&P 500?
VIDEO: Will Semiconductor Stock Top Take S&P 500 Lower?
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