Since the 2009 stock-market lows, investors have looked to the Semiconductor sector for strong returns and market leadership.
Just check out its performance vs. the broader stock market: Semiconductor ETF SMH +494% vs S&P 500 +262%.
With numbers that double those of the S&P 500, it’s fair to say that the Semiconductors have provided important leadership for this bull market.
And that leadership has become much more apparent (and “visual”) in the past 18-24 months. Just look at the Semiconductor rally and outperformance! See chart below.
If you look closely at the chart above, you’ll note the recent downturn/pullback for SMH. That brings us to the importance of our next chart – a “monthly” bar chart that highlights why the Semiconductors have pulled back here.
Semiconductors Testing 2000 Highs
SMH recently tested its 2000 price highs (see points 1 & 2 on the chart below), before reversing lower to test uptrend price support (point 3). This action created a bearish reversal pattern and gave market bulls a strong reason to put SMH on their radar.
One thing is certain: Bullish investors don’t want to see this market leader break down! 
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