This morning, the popular Vaneck Vectors Semiconductor ETF (SMH) is declining by 2.70% to $245.45 a share. On April 5, 2021 the SMH traded up to it’s all time high from February 2021. The popular ETF was putting in a nice looking bullish consolidation pattern after hitting the double top formation. This consolidation pattern will usually form before an equity breaks out to new all time highs. Unfortunately, that consolidation base is breaking down and not breaking out which could lead to a failed pattern. Failed patterns around all time highs can often signal big reversals in the equity. So this pattern must be watched closely in the near term.
The Vaneck Vectors Semiconductor ETF (SMH) still has major daily chart support around the $216.00 level. This support area was the low pivot from March 8, 2021. A weekly close below this key support level would be very bearish for the semiconductor industry group and the possible the entire tech sector. At this time, it is still too soon to tell if today’s decline will lead to a major fall, but it is not a good start to the week. Remember, this industry group is usually a very good stock market barometer and often holds the keys to the broader market.
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