Semiconductor Stocks Hold The Keys To The Markets

One of the most important industry groups in the stock market is the semiconductor stocks. This industry group can be traded and followed by using the Vaneck Vectors Semiconductor ETF (SMH). Semiconductors are in just about every electronic device on the planet. We are told there is semiconductor shortage due to the coronavirus lockdown which makes this sector even more important at this time.

Currently, this Vaneck Vectors Semiconductor ETF (SMH) is still trading above it’s important 50-day moving average. The popular ETF has been trading sideways since June 1st, 2021, so a case can be made that it is in a choppy consolidation pattern. Traders should note that the Vaneck Vectors Semiconductor ETF (SMH) is still trading below its February and April 2021 highs. A failure to break out to new highs soon could be a big negative for the Vaneck Vectors Semiconductor ETF (SMH). Remember the old saying, the best moves come from failed moves. 

 At this time, it is prudent to give the Vaneck Vectors Semiconductor ETF (SMH) the benefit of the doubt because it is holding up. A daily chart close below the important 50-day moving average would be me in a very cautious position. This would be a warning sign for technology stocks and possibly many other sectors in the market.    

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