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Semiconductor ETF Faces Key Support Test


Strength in ETFs tracking the highly cyclical semiconductor industry often reflects bullish sentiment on the overall economy.

From a technical perspective, Market Vectors Semiconductor ETF (SMH) is facing a critical test at several support lines.

“After a big surge above $33 [a share], the Market Vectors Semiconductor ETF (SMH) peaked in mid-August and declined back to support in the $32.50 area,” according to StockCharts.

“Support here stems from broken resistance, the rising 200-day SMA [simple moving average] and the rising 50-day SMA,” StockCharts notes. “A successful test and break above $33 would be bullish. Failure to bounce and a break below $32 would be bearish.”

Semiconductor firms are more cyclical and more volatile than other kinds of tech companies, according to a Morningstar review of SMH.

The ETF has an expense ratio of 0.35%.

Other semiconductor ETFs include SPDR S&P Semiconductor ETF (NYSEArca: XSD) and PowerShares Dynamic Semiconductor Portfolio (PSI).

Market Vectors Semiconductor ETF

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.