The last time chip stocks did this, they dropped nearly 20%

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The semi surge could soon hit a wall.

Chip stocks reached a new all-time intraday high this week, driving the broader technology sector to fresh highs as well. But with the group now sitting at those inflated levels, market watchers are starting to worry that the rally could run out.

“I’m quite conflicted on this one because the fundamental backdrop isn’t very good, but there’s no question: the fact that the [VanEck Vectors Semiconductor ETF] has been able to make a new higher high is bullish, ” Matt Maley, chief market strategist at Miller Tabak, said Wednesday on CNBC’s “Trading Nation.”

However, looking at a 1½-year chart of the VanEck ETF, ticker SMH, the picture didn’t look quite as pristine to Maley, who also runs financial blog and newsletter


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