U.S. semiconductor stocks are wobbling after fresh U.S.-Iran tensions and disappointing signals from Samsung Electronics (005930.KS), opens new tab rattled confidence in the AI trade this week, and the charts suggest the pain may not be over.
The pullback follows an extraordinary run. Through the end of June, the Philadelphia Semiconductor Index (.SOX), opens new tab had surged 101% over the previous six months — its strongest first-half performance on record in data stretching back to 1994. Since then, momentum has evaporated. The index closed on Wednesday at about 12,575, or 14.1% below its June 22 record finish and down nearly 12% for July alone, putting it on track for its worst month since September 2022. Technical levels are flashing danger signs. The SOX has slipped below its 10-week moving average near 12,675. It also briefly violated a broken weekly trendline around 12,465 that had been acting as support. A weekly close back inside the old trading channel would look ominous — a possible signal that a bigger trend shift is under way. The June low of 11,794 would be the next line of defense. Below that, the rising 40-week moving average near 8,975 — which cushioned earlier dips this year — becomes the key support to watch. To flip the picture back to bullish, the SOX needs to reclaim the 10-week moving average and hold above it.
SOX down just over 14% from its June 22 record close, on pace for worst month since September 2022 Index has broken below the 10-week moving average (12,675) and re-entered a previously broken support channel (12,465) Next support levels are the June low of 11,794, then the rising 40-week average near 8,975 (Daily markets commentary from Reuters analysts on the signals financial charts are sending - and what they might mean.)
