Semiconductor investors had a lot to smile about last week. The eruption last week VanEck Semiconductor ETF SMH was just impressive. Both traders and investors would have liked to see it as this is the type of opportunity and momentum they dream about.

However, should investors and traders take their foot off the gas or keep pushing after such an explosive move?

SMH saw a notable breakout last week, surpassing the previous resistance level of $125 and making a fresh yearly high. This breakout suggests a shift in market sentiment towards semiconductor stocks as investors eagerly flock to the sector after realizing its growth potential.

The Outbreak

Last week’s breakout was impressive, with SMH ending the week up 8.46% at $133.3, marking a new yearly high. Prior to the breakout, SMH was already trading above the 200-day moving average and hovering around the 50-day and 20-day moving averages, suggesting an uptrend over a longer timeframe while consolidating in the near-term.

Participants must monitor SMH’s ability to sustain support above the breakout level. With the catalysts looming for the sector, SMH participants may want to see the price stabilize above the previous high of $132 and digest the recent move as indicators suggest the sector is overbought in the near-term.

The next potential resistance area and target to watch is around $140.

The upcoming catalyst for SMH

The highest weighted name in SMH, NVIDIA NVDA, will announce its results this week. This upcoming announcement adds an extra layer of anticipation and speculation. Will the earnings report further confirm the strength of the sector or pose new risks for investors? It’s a situation to keep an eye on.

Considering buying SMH?

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