Are Semiconductors (SMH) Setting Up For A Historic Breakout?

Over the years, we have consistently pointed out the importance of stock market leadership.

The premise is simple. If a sector is out-performing, find strong stocks within that sector. If we are in a bull market, follow out-performing sectors (leaders) for clues about the stock market’s health.

One such sector is the Semiconductors. Below is a “monthly” chart of the $SMH etf.

At first glance, we can see how the turn lower into 2022 lead the market lower and how the turn higher into 2023 has lead the market higher.

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Note that the long-term trend is still higher as the blue trend line support at (1) held firm. Equally important, $SMH put in a bullish reversal off of that support which lead the Semiconductors (and the market) higher.

Currently, $SMH is testing its prior highs at (2). And ‘holy cow’, it sure looks important what this market leader does next! Stay tuned!!

$SMH Semiconductors “monthly” Chart

smh semiconductors sector etf trading all time highs resistance chart image july 19

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.