Strength in ETFs tracking the highly cyclical semiconductor industry often reflects bullish sentiment on the overall economy.
From a technical perspective, Market Vectors Semiconductor ETF (NYSEArca: SMH) is facing a critical test at several support lines.
“After a big surge above $33 [a share], the Market Vectors Semiconductor ETF (SMH) peaked in mid-August and declined back to support in the $32.50 area,” according to StockCharts.
“Support here stems from broken resistance, the rising 200-day SMA [simple moving average] and the rising 50-day SMA,” StockCharts notes. “A successful test and break above $33 would be bullish. Failure to bounce and a break below $32 would be bearish.”
Semiconductor firms are more cyclical and more volatile than other kinds of tech companies, according to a Morningstar review of SMH.
The ETF has an expense ratio of 0.35%.
Other semiconductor ETFs include SPDR S&P Semiconductor ETF (NYSEArca: XSD) and PowerShares Dynamic Semiconductor Portfolio (NYSEArca:PSI).
Market Vectors Semiconductor ETF