Semiconductor stocks have been on a tear and rank among the many finest performers this 12 months. The VanEck Semiconductor ETF (SMH), a extensively watched gauge of the group, is up 39% 12 months so far in comparison with the S & P 500’s 14% acquire — and SMH is up practically 20% up to now month. But is the transfer too far, too quick? This week, SMH’s 14-day relative energy index (RSI) jumped above 80, a degree many technicians contemplate extraordinarily overbought. RSI is a technical buying and selling sign that measures the velocity of current positive aspects or losses: under 30 is often thought-about oversold whereas above 70 overbought. A learn above 80 is uncommon for an ETF like SMH and, over the previous decade, as tended to precede weak point somewhat than mark a contemporary leg larger. Since 2015 there have been three different events the place RSI’s SMH crossed above 80: at 6- and 12-months, ahead returns had been adverse every time. The 2021 setup was the ugliest with the fund dropping a third of its worth over the next 12 months. The June 2024 sign wasn’t as extreme however the fund nonetheless fell greater than 12% over the following six months and 5% a 12 months later. The most overbought among the many group proper now are ASML , Lam Research , Teradyne and Micron , every with an RSI above 79. None of this is future — remember this is a tiny pattern dimension — however when momentum runs scorching and positioning stretched, historical past would possibly argue for tighter danger administration. ( Learn the most effective 2026 methods from contained in the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and data here . )