Semiconductor and AI Trade Still Need a Bottom
SMH is building a bearish continuation structure after a roughly 20 percent drawdown and has not reclaimed key resistance.
Semiconductors already corrected hard, but the weekly structure still looks unfinished. An inside week after bearish engulfing action and a failure to reclaim the descending trendline keep the door open for more base-building or a retest of the prior channel rather than an immediate durable bottom.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| SMH | Short | Leadership has cracked, photonic leaders already warned of weakness, and price still needs a definitive base before aggressive re-entry makes sense. |
Large-TAM AI leaders down 20 to 35 percent can be nibbled selectively, but only with patience and incomplete conviction.
Deep drawdowns in high-TAM leaders often look like opportunities in hindsight, yet the sector remains crowded and many charts are still broken. The practical stance is light nibbling rather than full size until South Korea, semis, and related high-beta proxies show clearer basing.
| Instrument | Side | Target | Reason |
|---|---|---|---|
| ASTS | Long | Selective value is emerging outside the most broken crowded AI names, and space-linked communications remain a multi-year growth vector even while broad AI beta stays unstable. | |
| SMTI | Long | Capital is rotating toward cleaner setups while waiting for semis and Korea to bottom, making selective non-crowded names more attractive than chasing broken AI leadership. |
Themes
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