Chart of the Day - Wednesday, May 24, 2023

SMH Semiconductor Etf will show an island reversal tomorrow based on Nvidia's results. This is a rare bullish pattern. Long Nvda. pic.twitter.com/8WDH0zuxNE

— Roy Mattox (@RoyLMattox) May 24, 2023

Today's Chart of the Day was shared by Roy Mattox (@RoyLMattox). The Semiconductor ETF, $SMH, gapped lower by -1.93% this morning, ending the day down -1.47%. However, the largest component in this ETF ($NVDA) is surging more than +25% after hours. If $NVDA can hold this gain overnight, $SMH will likely gap higher tomorrow morning. Roy points out that a gap lower followed by a gap higher would create an island reversal pattern, or abandoned baby as it's also called. A lot can happen between now and tomorrow's close, but this is bullish for both $SMH and the broader market. Will $NVDA save the bulls?