Chips hit key support for second day
Bryan McCormick | firstname.lastname@example.org
The 50-day average, shown in orange on the daily chart below, is at $30.40 and not far from the current price of $30.55 this afternoon. If the SMH breaks below that level, it would be a negative not only for the semiconductor names but also for the tech sector in general. As we saw in early October, chip stocks first led the way down and then the way back up.
Conversely, if the 50-day moving average holds as support through the day, it would be a positive. This would suggest that the bulls are ready to keep buying at this price level in both semis and the broader market.
Given the magnet effect of expiration, we will wait until Monday for the expiration overhang to dissipate before drawing too many conclusions.
(Chart data provided by Thomson Reuters)