1. SMH is significantly above its 200-day moving average. 2. A similar situation in July 2024 led to a 30% drop. 3. SMH has risen over 20% since October, outpacing the market. 4. Overbought signals suggest potential for a 10-20% correction. 5. AI growth remains strong, but sentiment may drive volatility.
The significant gap above the 200-day moving average indicates potential overvaluation. Historical corrections suggest imminent price corrections after such stretches.
The article highlights significant overvaluation risks impacting SMH in the near term. Investors should be cautious given historical patterns of volatility.
Technical indicators indicate imminent corrective action rather than long-term decline, reflecting previous patterns. Corrections typically occur quickly due to emotional trading.