The semiconductors have usually been called the leading sector of the NASDAQ Composite. Many traders believe that whenever the semiconductors lead technology higher this is a sign of strength in the market and that the NASDAQ Composite will usually lead the major stock indexes higher. Recently, over the past three trading session the Semiconductor Holders Trust (NYSE:SMH) has come under pressure. This ETF will hold a basket of the leading semiconductor stocks.
When the SMH declines it is usually a good chance that most of the leading stocks in the sector are declining. The SMH has not tagged it’s daily chart 50 moving moving average since September 23, 2010 when the SMH began to break out. Therefore, the SMH is now long overdue to decline into that 50 moving average level. Traders can watch for some minor daily chart support around the $34.50-$34.00 area on the SMH. Below are the top 10 holdings of the Semiconductors Holders Trust (NYSE:SMH):
|Top 10 Holdings (93.69% of Total Assets)|
Source: Yahoo Finance