The VanEck Semiconductor ETF (SMH) trades within the forecasted extreme zone of 309.83 to 353.03, showing signs of technical overheating. Analysts expect an average 12-month price target of 343.93, with bullish projections reaching up to 451.50. Strong demand for semiconductors—driven by AI, electric vehicles, and cloud infrastructure—continues to push momentum. All major moving averages, from the 10-day to the 200-day, point to a “Buy” signal. At the same time, indicators like RSI and STOCH suggest overbought conditions. Traders should watch for signs of consolidation or a pullback before the next leg higher.

From October 2025 into early 2026, SMH’s direction depends on interest rate trends, chip supply dynamics, and earnings from top holdings such as NVIDIA, TSMC, and Broadcom. The ETF holds a “Moderate Buy” rating, backed by 22 buy recommendations and 4 holds. While long-term growth in semiconductors looks solid, short-term risks may surface from global tensions or cyclical shifts. New investors might wait for clearer support levels or a dip before entering. Those already in the trade could protect gains by trimming positions or setting stop-loss levels as SMH moves through this high-risk zone.

Elliott Wave Outlook: SMH Daily Chart May 13th

SMH recently completed a complex double correction (w, x, y), confirming the shift from a failed zigzag (a, b, c) to a deeper structural reset. The breach of wave ((A)) by wave ((C)) and the August 2024 low signaled this transition early, with wave w ending at 200.49, wave x peaking at 269.66 through two diagonal formations, and wave y bottoming at 170.11—right within the Fibonacci extension zone of 186.80 to 167.22. From that low, SMH began a clear impulsive move upward, reinforcing the bullish outlook. As the structure unfolded, corrections in 3, 7, or 11 swings were expected to support the trend. Therefore, buying the dips was the preferred strategy while momentum was holden.

We analyzed to focus on the 309.83 to 353.03 zone as a likely target for wave (V) to complete. This range marks a critical threshold where bullish exhaustion could trigger a broader market correction. With the impulse in motion and technical patterns aligning, traders should stay alert for signs of topping behavior once SMH approaches this zone. The setup favors continued upside in the near term, but disciplined risk management will be key as the ETF enters historically reactive levels.

Elliott Wave Outlook: SMH Daily Chart September 27th

SMH continues to push through a strong impulsive structure. All signs suggest wave V is already in motion. The weekly chart hints at wave III still unfolding, but we are going to assume a conservative mood for now. The structure from the 170.11 low remains solid. Bullish momentum dominates unless proven otherwise. We expect wave ((3)) to peak by late September. A swift correction in wave ((4)) may follow through October. If the pattern holds, November and December could bring a final rally. A broader reset may begin in early 2026.

SMH now trades inside the critical 309.83–353.03 zone. This area often signals exhaustion and potential reversal. Traders must stay alert and act with precision. The wave V structure looks clean and actionable. The strategy remains simple: buy dips after corrections in 3, 7, or 11 swings. Momentum still favors the bulls, but risk increases inside this zone. A sharp correction could unfold at any moment. Watch for signs of topping or failed breakouts. Discipline and tactical awareness are essential. Ride the impulse while it lasts but stay ready to pivot.

Transform Your Trading with Elliott Wave Forecast!

Ready to take control of your trading journey? At Elliott Wave Forecast, we provide the tools you need to stay ahead in the market:

✅ Blue Boxes: Stay ahead in the market with fresh 1-hour charts updated four times daily, daily 4-hour charts on 78 instruments, and precise Blue Box zones that highlight high-probability trade setups based on sequences and cycles.

✅ Live Sessions: Join our daily live discussions and stay on the right side of the market.

✅ Real-Time Guidance: Get your questions answered in our interactive chat room with expert moderators.

🔥 Special Offer: Start your journey with a 14-day trial for only $0.99. Gain access to exclusive forecasts and Blue Box trade setups. No risks, cancel anytime by reaching out to us at support@elliottwave-forecast.com.

💡 Don’t wait and get a DISCOUNT for any plan!

Click in the next link, go to Home Chat and ask for a flat discount code saying that you saw this in Luis’ Blog: 🌐 elliottwave-forecast.com

The VanEck Semiconductor ETF (SMH) gives investors access to 25 major U.S.-listed semiconductor companies. The fund includes NVIDIA, Taiwan Semiconductor, Broadcom, Texas Instruments, QUALCOMM, ASML Holding, Applied Materials, Lam Research, Micron Technology, and AMD.

Analysts view SMH as a strong investment in a sector driving advancements in AI, cloud computing, and high-performance computing. While volatile, experts emphasize long-term growth, supported by rising demand for AI, 5G, and autonomous vehicles. Despite market fluctuations, SMH often outperforms when investor sentiment improves.

Investors closely monitor global supply chains, trade policies, and new chip innovations, which could shape future growth. With these factors influencing the market, SMH remains an attractive option for exposure to the semiconductor industry.

Last SMH Daily Chart January 16th

Earlier this year, on January 16, 2025, we analyzed the VanEck Semiconductor ETF (SMH) and observed its sideways movement between $230 and $260 in the daily timeframe. As expected, the market rallied from $222.20, but momentum failed to break previous highs or reach the $269.50 level. Consequently, we adjusted our chart and identified Wave I as a leading diagonal that ended at $262.26. Since October 2024, the price traded within a Wave II correction, which we classified as a running flat correction.

At that time, we believed Wave III had already started, with Wave ((1)) of III topping at $257.20 before entering a Wave ((2)) pullback. As long as price action held above $240.62, we expected a bullish move targeting a break above $283.07.

However, while we favored the running flat correction scenario for Wave II, we acknowledged the possibility of an expanded flat correction. If the market had fallen below $240.62, SMH would have likely extended its decline toward the $235.29 – $228.61 range before completing Wave II and resuming its upward trend.  (If you want to learn more about flat corrections, please follow these links: Elliott Wave Education and Elliott Wave Theory.)

SMH Daily Chart May 13th

In our latest update, we observed that the zigzag correction (a, b, c) failed, leading to a double correction (w, x, y). This aligns with the fundamental concept that corrections move in 3, 7, or 11 swings, forming a simple correction, a double correction, or a triple correction. As analysts, we must assess which of these three scenarios is most likely to occur.

When wave (C) of ((W)) broke below wave (A), it served as an early signal that a double correction might unfold. This was later confirmed when the August 2024 low was breached. From the wave (III) high, the first leg of the double correction formed as a zigzag, ending wave w at 200.49. Following that, another zigzag pattern developed, featuring two diagonals’ structures one leading and one ending which marked the completion of wave x at 269.66. Finally, the double correction in wave y wrapped up at 170.11, completing wave (IV) within the Fibonacci extension zone of 186.80 – 167.22 (100% – 123%).

Current Outlook & Strategy

At present, it is clear that SMH is developing an impulse from the 170.11 low. The primary expectation is for the upward movement to persist, supported by corrections in 3, 7, or 11 swings. Given this setup, the best strategy is to buy the dips, as the bullish trend remains intact.

Looking ahead, we are targeting the 309.83 – 353.03 zone as a potential area for wave (V) to complete. Once SMH reaches this range, a more significant correction in the market could follow.

Be good and Trade Smart!

 

Transform Your Trading with Elliott Wave Forecast!

Ready to take control of your trading journey? At Elliott Wave Forecast, we provide the tools you need to stay ahead in the market:

✅ Hourly Updates: Fresh 1-hour charts updated 4 times a day and 4-hour charts updated daily for 78 instruments.

✅ Blue Boxes: High-frequency trading zones, calculated using sequences, cycles, and extensions. These areas pinpoint ideal setups for smarter trades.

✅ Live Sessions: Join our daily live discussions and stay on the right side of the market.

✅ Real-Time Guidance: Get your questions answered in our interactive chat room with expert moderators.

 

🔥 Exclusive Offer: Start your journey with a 14-day trial for only $9.99. Gain access to exclusive forecasts and Blue Box trade setups. No risks, cancel anytime by reaching out to us at support@elliottwave-forecast.com.

💡 Don’t wait! Elevate your trading game now. Trial us at: 🌐 elliottwave-forecast.com