Some of the largest holdings in SMH appear poised to rally, which would trigger more upside for the fund.

“Gordon also points out that some of the biggest holdings in SMH, including Taiwan Semiconductor, Intel and Nvidia, look strong, and that’s a bullish signal,” reports CNBC.

Traders looking to bet on downside for chip stocks can consider the ProShares UltraShort Semiconductors (NYSEArca: SSG), which takes the -2x or -200% daily performance of the Dow Jones U.S. Semiconductors Index, and the Direxion Daily Semiconductors Bear 3x Shares (NYSEArca: SOXS), which provides a -3x or -300% performance of the PHLX Semiconductor Select Index.

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