Texas Instruments (NYSE: TXN) managed to rise about 1% on Thursday even though the company warned its second-quarter profit and revenue might come in weaker than expected.
The stock’s climb helped pull Semiconductor HOLDRS (AMEX: SMH) higher. However, some analysts see a bearish “double top” pattern playing out in the semiconductor ETF.
Serge Farra at The Stock & ETF Corner had previously identified the technical pattern and on Thursday wrote the double top “is unfolding pretty well.”
Semiconductor HOLDRS, which is a static basket of stocks, counts Texas Instruments as its top holding at 21.5% of the portfolio. Intel (NasdaqGS: INTC) also dominates the ETF at 19.4% of assets.
The sector fund is up about 4% so far this year.
A double top reversal is a bearish pattern made up of two consecutive peaks that are roughly equal, with a moderate trough in-between, according to StockCharts.com.
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