$SMH/$NAS100 is clearly in a bearish pattern

The semiconductor sector was the poster child of the 2023 & 2024 bull market. The cap weighted index is a momentum play with heavy weights like NVDA and AVGO outperforming and hence the ETF gives more than 100% return in 2 years.

NASDAQ100 index is also cap weighted and momentum oriented. But the index provides diversification to a certain extent. SMH hit an ATH in June 2024. In this chart we are plotting the ratio of SMH vs $NAS100. The ratio peaked in June 2024. The ratio is making new lower lows and lower highs.

If we plot the inverse head and shoulder, we see that the ratio can probably hit the neckline which lies at 0.01. This will indicate a 10% more downside in SMH compared to $NAS100. Currently SMH is at 226 $. This will indicate a low of 200 $ and then it might indicate a bounce back from those levels.

Consolidation of SMH around 220 $ - 200 $.