Semiconductor ETF SMH: Analysis And Trade Levels

By Gareth Soloway of In the Money Stocks

President & Chief Market Strategist at IntheMoneyStocks • Nov 25, 2020 at 1:24 PM EST

There is reason to think the semi sector may see a pullback in the near-term. This comes from classic channel analysis.

The semiconductor sector has been hot as it continues to make all-time highs even as the Nasdaq 100 has stalled. While the move has been strong, there is reason to think the semi sector may see a pullback in the near-term. This comes from classic channel analysis.

The semi ETF SMH has been hammering against the upper channel line. This signals a likely drop to the lower channel trend line. This amazing channel on the semi ETF SMH stretches back to April 2020. Price has stayed between the perfectly parallel lines of the channel since then and every time price hits the upper channel it falls, every time it tags the lower trend line of the channel it bounces. This sets up for an easy short sell trade on the semiconductor ETF SMH over the next few weeks. The downside target could be in the range of $185 from its current $203 price point.

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