The Market Vectors Semiconductor (SMH) ETF has been trading in a narrow channel pattern for the last month, above support in the $53.75 area and after meeting resistance near the December 2015 highs in the $56.00 area. Last week it retested the channel low and the technical indicators suggest it is in danger of breaking down.
The RSI moved below its 21 period average this month and has continued to track lower, while the MacD made a bearish crossover about the same time and is trending in the same direction. Chaikin money flow has crossed below its signal line and is reflecting distribution during this consolidation phase. A lower candle close that takes out the channel bottom projects an initial target price back down near the flat 200 day moving average.