Is the Party Over for Semiconductors?
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
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