Chip stocks hit record highs but technical signals suggest bearish momentum ahead

The iShares Semiconductor ETF (SOXX) reached new record highs, rising 6.6% recently and marking its fourth record close this month amid a 112% gain this year. Despite these gains, the Relative Strength Index (RSI) for SOXX has fallen below the overbought threshold, indicating weakening momentum. This divergence suggests that while prices are climbing, the underlying technical strength may be fading, signaling potential bearish trends ahead. Investors should be cautious as the chip sector's strong run may face a correction.