By Doug Busch
Semiconductor stocks have been a key source of support within the broader technology sector, helping to offset weakness in other areas. If that leadership falters, however, it could remove an important pillar for the group, raising the risk of a more pronounced slowdown across not only tech, but also the overall market.
This viewpoint can be seen by looking at the daily chart of the VanEck Semiconductor ETF. The fund is having issues with the $400 level as it carves out the right side of a bearish head and shoulders pattern. There were some canaries in the coal mine with back-to-back doji candles on January 28-29 that should have alerted the bulls. Bearish RSI divergence occurred in January and February: the relative strength index made a lower high while price carved out a higher high, suggesting momentum was waning. A decisive break below $375 could quickly send the fund toward $325.
The VanEck Semiconductor ETF was trading around $382 Thursday.
Let's look at two high-profile names in the arena.
Nvidia, a traditional semiconductor leader, is up 52% over the last year, but is down 7% year to date. It now trades 19% off its most recent 52-week high, and this month has lost both its 50- and 200- day simple moving averages. Notice that its weakness is not much new as on the ratio chart against the VanEck Semiconductor ETF it has lagged since last August. Since late last October it has carved out a bearish descending triangle and a break below $170 could accelerate a move lower toward $130 by mid-2026. It would also negate three bullish candlestick patterns: a harami cross (doji) on December 18, a morning star completed on February 6, and an engulfing pattern on March 2. The stock never felt comfortable above the very round $200 level in late October and early November, and it appears ready to roll over.
Nvidia was trading around $173 Thursday.
Micron, a recent darling of the semiconductor industry, is now on a nasty six-day losing streak, which has erased about one-quarter of its value. Notice how volume has been elevated since the March 19 earnings-related session. Additionally, the double bottom breakout above a $436.99 pivot unraveled very quickly, a red flag as we know the best breakouts tend to work out right away. The doji candle on Wednesday has so far failed to stem the selling; as of Thursday afternoon the stock is down 10%. It has broken below a ratio chart uptrend against the VanEck Semiconductor ETF, and lost its 21-day exponential moving average. This could trade toward the very round $300 level in the near term.
Micron was trading around $355 Thursday.
Should the current cracks widen, the implications could extend well beyond semiconductors.
Write to Doug Busch at douglas.busch@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 26, 2026 16:25 ET (20:25 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments