The VanEck Semiconductor ETF (SMH) remains in the spotlight on Wednesday after tumbling more than 7% yesterday to register its largest daily percentage decline since March 2020 amid a broad-based selloff in chip stocks. The top-weighted stock in the fund, 澳洲幸运5官方开奖结果体彩网:artificial intelligence (AI) darling Nvidia (NVDA), led the sell-off, slumping nearly 10%, while other leading chipmakers in the ETF’s 澳洲幸运5官方开奖结果体彩网:portfolio, including Intel (INTC), Marvell Technology (MRVL) and Micron (MU), all dropped by around 8%.

The chips sector has seen significant gains over the past year, as AI’s widespread adoption bolsters demand. 澳洲幸运5官方开奖结果体彩网:Volatility across the group has increased in recent trading sessions after Nvidia reported earnings that topped Wall Street estimates but showed that 澳洲幸运5官方开奖结果体彩网:growth is slowing.

Below, we’ll take a closer look at the ETF's chart and use 澳洲幸运5官方开奖结果体彩网:technical analysis to identiඣfy important levels to watch out for amid increasing price fluctuations꧃ in chip stocks.

Recovery Stalls at 50-Day Moving Average

Since forming a 澳洲幸运5官方开奖结果体彩网:double top in June and July, the fund’s price suffered a significant 澳洲幸运5官方开奖结果体彩网:correction before staging a relief rally from the closely-watched 200♛-day moving average (MA).

However, more recently, investors resumed selling on a retracement to the 澳洲幸运5官方开奖结果体彩网:50-day MA, with Tuesday’s drop taking place on the highest daily 澳洲幸运5官方开奖结果体彩网:trading volume since early August, pointing to conviction behind 💎ꩵthe move from larger market participants.

After falling 7ಞ.5% on Tuesday, SMH was down another 1.4% to $222.00 in premarket trading Wednesday at around 7:15 a.m. ET.

Monitor These Key Chart Levels

Looking ahead, investors should eye four key price levels on the ETF’s chart that could prove pivotal if weakness across the chip se♛ctor continues. 

The first sits around $217, a level on the chart where the fund could find initial support near the March pullback low, which also currently closely aligns with the risi🔯ng 200-day MA and a range of trading activity positioned near last month’s low.

A 澳洲幸运5官方开奖结果体彩网:breakdown below this level could see the ETF’s price decline to the $200 area, where it may encounter buying interest around the prominent April and August troughs. Last month’s low marks a technically important level, given the fund’s significant intraday reversal from this chart region.

The next lower price level to watch lies at $176, a location where the ETF could attract support from the December high that formed early in the stock’s up-trending move from October to March.

A more protracted correction may see the ETF revisit lower support around $161. This area could entice longer-term 澳洲幸运5官方开奖结果体彩网:buy-and-hold investors seeking 澳洲幸运5官方开奖结果体彩网:entry points near a range of comparable trading levels on the chart betwee𒅌n July and December last ye𒀰ar.

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