Semiconductor stocks have surged this year, thanks in large part to
NVDA
Nvidia. But they could be losing relative strength to software makers within the technology sector.
Today’s main chart focuses on the
SMH
VanEck Semiconductor ETF, which closely tracks the
SOX
Philadelphia Semiconductor Index. It recently slipped below the 50-day simple moving average (SMA), which may signal weakness over the intermediate term.
The lower study shows its relative strength versus the
NDX
Nasdaq-100. Notice how it’s mostly lagged the broader index since late June.
Next, consider the same chart and studies for the
IGV
iShares Software ETF. It’s shown the opposite patterns. Price is above the 50-day SMA and relative strength against the Nasdaq-100 has recently improved.
The last chart compares these two ETFs as a ratio (IGV/SMH). It uses monthly candles to provide a long-term view. Software could be turning up from a 17-year low, which may also suggest relative strength is shifting between these two major groups within the key technology sector.
Standardized Performances for ETF mentioned above:
VanEck Semiconductor ETF (SMH):
1-year: +45.61%
5-years: +186.80%
10-years: +741.25%
iShares Expanded Tech Software ETF (IGV):
1-year: +28%
5-years: +79.25%
10-years: +390.50%
(As of August 31, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
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Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
NVDA
Nvidia. But they could be losing relative strength to software makers within the technology sector. Today’s main chart focuses on the
SMH
VanEck Semiconductor ETF, which closely tracks the
SOX
Philadelphia Semiconductor Index. It recently slipped below the 50-day simple moving average (SMA), which may signal weakness over the intermediate term. The lower study shows its relative strength versus the
NDX
Nasdaq-100. Notice how it’s mostly lagged the broader index since late June.
IGV
iShares Software ETF. It’s shown the opposite patterns. Price is above the 50-day SMA and relative strength against the Nasdaq-100 has recently improved. The last chart compares these two ETFs as a ratio (IGV/SMH). It uses monthly candles to provide a long-term view. Software could be turning up from a 17-year low, which may also suggest relative strength is shifting between these two major groups within the key technology sector.
Standardized Performances for ETF mentioned above:
VanEck Semiconductor ETF (SMH):
1-year: +45.61%
5-years: +186.80%
10-years: +741.25%
iShares Expanded Tech Software ETF (IGV):
1-year: +28%
5-years: +79.25%
10-years: +390.50%
(As of August 31, 2023)
Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.
Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.