Since the 2009 lows, would you rather have owned Semiconductors (SMH) or the S&P 500? Since the 2009 lows, Semiconductors are up 550%, more than double the returns of the S&P. This very strong index is now making an attempt to “Escape” from where it was back in 2000!
SMH has remained inside of rising channel (A) since the lows in 2009. The near vertical rally since it hit the support back in 2016, has it attempting to escape above the top of rising channel (A) and the highs of 2000 at (2), at the same time.
Below looks at FAANG stocks and the S&P 500. As you can see “All” of them remain inside rising channels. NFLX and AMZN are attempting channel breakouts and AAPL is attempting to break out above old highs.
If SMH is able to accomplish a dual breakout at (2) in the top chart, it would be good for it, FAANG stocks and the broad market. Keep an eye on this leading sector friends, what it does here should be important for portfolio construction going forward!