Latest Outlook on QQQ & Semiconductor Sector

1. Revisiting the QQQ Chart: Key Support & Resistance Levels

Let’s begin with a fresh look at the current QQQ chart, with updated technical insights:

a. Adjusted Rising Wedge Formation

We have slightly modified the rising wedge structure by incorporating more significant candlestick lows—most notably the low from October 31. This refinement provides a more accurate depiction of current support and resistance within the pattern.

b. Key Levels to Watch:

• New Support Pivot – 510: This is now a critical support level for the ongoing uptrend. If 510 holds, the broader ascending trend remains intact.

• Downside Risk: A breakdown below 510 would open downside targets at 502, 492, and 480.

• Upside Potential: If QQQ continues higher, watch for resistance at 518 and 527.

While statistically, a rising wedge tends to resolve to the downside, the timing of a breakdown is often unpredictable. For now, our focus should remain on whether 510 holds as solid support and whether QQQ can continue testing higher resistance levels.

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2. Opportunity in the Semiconductor Sector (SMH)

The semiconductor ETF (SMH) has been consolidating sideways since July. Over the past 6–7 weeks, price action has narrowed, suggesting the consolidation phase may be coming to an end. If the prior uptrend resumes, this could lead to a fresh breakout leg:

• Support: The $240 level marks the lower bound of the current value range and serves as an important support.

• Upside Target: A move toward $300 is plausible, though it may extend into Q1 2025 to fully materialize.

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3. Sector Rotation & Rebalancing Within SMH

Although NVIDIA (NVDA) has lost its leadership position, it appears capital is rotating out of NVDA and into other semiconductor names within the SMH index. This internal sector rebalancing could serve as a structural tailwind, helping lift the entire semiconductor group to new highs.

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4. Notable Semiconductor Stocks to Watch

1. ASML

• The quarterly chart shows a pullback into a key value zone, where a clear shift between resistance and support is emerging—indicating renewed investment value.

2. AMAT & LRCX

• On a monthly chart basis, both have retraced back to crucial levels around their December 2023 breakout zones. The support-resistance flip here is significant and worth close attention.

3. TSMC (TSM)

• Demonstrating strength on a larger time frame. After filling its daily gap, TSM is showing signs of a “Push Down Fail” pattern—a failed breakdown that often precedes a rebound.

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5. Summary: Two Key Market Themes

• QQQ’s Uptrend Intact:

The broader Nasdaq uptrend remains valid, but it is crucial to monitor whether 510 holds as support in the coming sessions.

• Semiconductors Poised for Breakout:

The SMH sector appears ready to resume upward momentum after a prolonged consolidation. Stocks like ASML, AMAT, and LRCX—which exhibit large time-frame support-resistance reversals—are especially compelling.