Chart of the Day - Tuesday, September 3, 2024

Patrick Dunuwila
September 3, 2024

Chart of the Day

🏆  Today’s Chart of the Day was shared by @ivanhoff2.
 

  • The VanEck Semiconductor ETF ($SMH) had its worst day since March 2020 today, sliding -7.5%. Semis become the largest industry group in the S&P 500 and Nasdaq, weighing 11% and 24%, respectively.
     
  • The largest component, Nvidia ($NVDA), did the most damage, dropping -9.5%. However, the weakness was broad, with all 26 components dropping more than -4.0%. 
     
  • @Ivanhoff points out that $SMH has formed a potential Head & Shoulders Top over the past six months. The neckline of this bearish pattern is around $200, established by the April/August lows. 
     

Takeaway: Today was the worst day for Semiconductors since March 2020. $SMH is forming a potential Head & Shoulders Top with a neckline at $200. A breakdown would put significant pressure on the S&P 500 and Nasdaq, as Semiconductors have become the largest industry group.

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