From Seekingalpha · Mott Capital Management · · 1m
Semiconductor Stocks Face Explosive Move
Bank of Korea rate decision could trigger 8% drop in semiconductor ETF as won strengthens.
In brief
Bank of Korea rate decision could trigger 8% drop in semiconductor ETF as won strengthens. Semiconductor stocks may drop 8% if Bank of Korea rate hike strengthens won and breaks $540 support for SMH ETF. Originally reported by Seekingalpha.
Semiconductor ETF at critical support
The VanEck Semiconductor ETF sits at critical technical support with upcoming Bank of Korea rate decisions likely to drive the next major SMH move.
Korean won pressure on market
Recent strength in the Korean won and repatriation of capital have pressured the KOSPI and, by extension, the U.S. semiconductor sector.
Hawkish Bank of Korea stance
A more hawkish-than-expected Bank of Korea stance could strengthen the won further, risking a break of SMH support and an 8% ETF decline.
SMH support holds
If SMH holds $540 support and the won weakens post-meeting, the sector could rally back toward recent highs.
The essence
Semiconductor stocks may drop 8% if Bank of Korea rate hike strengthens won and breaks $540 support for SMH ETF.
