Tech stocks getting crushed as rate fears return — short the semiconductor slide
Thesis
Wall Street is rapidly dumping tech and AI stocks after a surprisingly strong jobs report killed hopes for lower interest rates. Japan's markets are already set to tumble, and U.S. stock futures are falling, indicating the panic that started Friday is spilling over into the new week. Major semiconductor companies are leading the charge lower, with Marvell experiencing a historic drop. This shift from greed to fear in the tech sector suggests more downside is likely in the coming days as investors rush to sell.
Strategy approach
Build a rule-based strategy that enters short SMH (VanEck Semiconductor ETF) on the daily timeframe when the price crosses below the 20-day simple moving average and the RSI(14) is less than 40. Exit the position when the RSI(14) drops below 25, or if the price closes above the 10-day simple moving average. Use a 3% stop loss.