Verified Investing on $SMH (Nov 3, 2026)
SMH is likely to bounce near- to medium-term from its 495-503 support zone (50-week average 495, pivot low 503.63) back at least to the 20-week average at 570 after tech's heavy selling; but price must reach one of those levels soon, otherwise stabilization above support could bring lateral consolidation and further declines.
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Semiconductor stocks rose by 2%. This is the SMH ETF, for semiconductor chips,
Next is the SMH fund. Guys, in my opinion, this is the true indicator of ups and downs. And like the Q index, folks, look at this massive shift that has taken place right here on the chart.
The lowest level for this transition is 503.63. What I am about to do is slightly different from what I did in previous days when analyzing the SMH index. I will convert it to the weekly timeframe because I believe this is very important for everyone to understand .
As I mentioned, for me, the SMH index is a measure of whether the market is trending upwards or downwards. Now, clearly on the weekly timeframe, look at these red candles that have all appeared during the past five trading weeks.
They all point directly to a decline on the chart. Now , if you add the weekly moving averages , notice where the price is approaching. This blue line represents the 50-week moving average at the 495 level.
Remember this lower turning point at 503. So, the area between 495 and 503 is the support zone I see. If the price continues to fall, we are likely to see a near- to medium-term bounce, bringing us back at least to the 20-week moving average level at 570 points.
This is what I see as this selling continues, and it is likely that we are heading for a rebound. When we combine the potential bounce levels on the Nasdaq as well as on the SMH, it tells you that the technology sector, as we already know, has been badly hit and may be worthy of a technical bounce, especially with the technical indicators on the chart, specifically the 50-week moving average that is getting very close.
What might change my analysis here is if the price starts to stabilize without bouncing back before reaching the 50-week moving average or the bottom of this pivot point at 503.
One of these two levels must be reached, and it must happen sooner rather than later for this bouncing back to begin. Otherwise, lateral consolidation above the support level could actually lead to further declines.
Therefore, the timing of this is extremely important. I want to see more selling followed by an imminent bounce on the SMH index.
What this channel has said about $SMH
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