Is the Party Over for Semiconductors?

SmartReversals
07-03

Cracks were anticipated for semiconductors, as the oversold conditions for the Magnificent 7

Last week, the Weekly Compass highlighted a clear divergence within the technology sector: Semiconductors were signaling a bearish reversal, while the Magnificent Seven were showing deep oversold conditions in the daily backed by massive daily volume.

The results this week confirm this rotation. The semiconductor ETF, $VanEck Semiconductor ETF(SMH)$ , fell -9.7%. $Micron Technology(MU)$ served as a stark reminder of gravity, dropping -14% as the stock moved to fill the 1,083.3 gap I anticipated in the Weekly Compass.

Conversely, the Magnificent Seven presented signs of awakening, with the following weekly gains: $Apple(AAPL)$ +8.7%, $Alphabet(GOOG)$ +6.4%, $Meta Platforms, Inc.(META)$ +6.0%, $Microsoft(MSFT)$ followed with a +4.7% gain as a high-probability setup, $Amazon.com(AMZN)$ +4.0% and $Tesla Motors(TSLA)$ +3.6% (despite today's flush). $NVIDIA(NVDA)$ rounded out the group as the weakest performer with a weekly gain of +1.2%.

Beyond technology, both $SPDR Gold ETF(GLD)$ and $iShares Silver Trust(SLV)$ are showing signs of a bounce, jumping 1.2% and 3.3% respectively, as the technical formations indicated oversold conditions last Saturday

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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