📈 Semiconductors Setting Up?

This is a make or break week for semis. Here's why.

Semiconductors in Focus

One of the most interesting sectors out there right now is semiconductors.

This sector obviously has been a market leader for the last few years, spurred by NVDA’s massive rally. However it has been off to a sluggish end of 2024 and beginning of 2025.

This is a huge week for the sector to see if it has legs or if we will continue to sell off.

Technical Analysis

Below is a 4 hour chart of the SOXX, the semiconductor index. You should immediately pick up on what I’m seeing.

You can see that we undercut support only to immediately rally back over.

We also have a positive divergence on the RSI from the last time we were at this support level.

These are both very positive signs for the index, as it could be the beginning of a double bottom reversal.

Why is it Moving/What’s Next?

This week is especially important for the sector because it is Nvidia’s quantum week, where they are speaking to their developments in quantum computing and inviting other companies in the space to speak as well.

This anticipation has been what has driven semiconductors higher. Therefore, the reaction to the news will be crucial.

Whether it is a sell-the-news event or we see sustained buying remains to be seen. What we do know is that the reaction will be extremely telling.

Is this simply a short covering rally or are we actually ready to bottom?

I walk through my interpretation of that question here: