StockCharts TV on $SMH (Nov 4, 2026)
SMH has formed a huge double peak and, after long strong performance, is testing its 200-day moving average for the first time in a while while approaching oversold; the setup looks extremely ominous. An open gap with weak support below may eventually be tested, and there is risk if the oversold approach fails to spark the usual strong demand.
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Another reason for this, of course, is that the technology sector has begun to decline, and as we know, it dictates most of the price movement of the S&P 500 index. At the forefront of this, of course, is the Semiconductor Exchange-Traded Fund ( SMH).
And frankly, it's a double peak, and a huge peak at that. We can look here at the time when there are smaller bearish patterns that have been activated, or marginal bearish breaks that have not been able to go beyond this area downwards .
Now that the SMH index has returned to that same level, its appearance is extremely ominous. It is now testing its 200-day moving average for the first time in a while, and is again approaching oversold territory, something we haven't seen in a long time.
This does not usually happen, especially in the SMH index, which has performed well for a very long time . So, it goes without saying that there is an open area below this level, a gap with weak support that may eventually be tested, and of course, it resembles a void, and if it opens up, it may drag a lot with it, right?
This is no longer surprising, but we must keep these risks in mind, especially if approaching the oversold zone does not stimulate the strong demand we usually see when the SMH index declines.
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