In mid March I warned that investors should “watch those divergences” on the Nasdaq. Well, those bearish divergences have helped to form another bearish pattern that investors need to keep an eye on.
And this pattern will likely determine whether or not investors “Sell in May.”
Today’s chart includes the Semiconductors ETF (NYSE:SMH) alongside the Nasdaq 100 (NDX). As you can see, both indices have formed bearish head-and-shoulders patterns.
BUT they will only prove to be bearish IF the neckline is broken to the downside. So keep your eye on the green line in the charts below. Tech stocks are giving investors reason for pause, here, and will likely determine what’s next for the correction. Stay tuned!
