Semiconductor index SOX swings from overbought to oversold in five months
The SOX index now sits 17% below its 200-day moving average, after trading 75% above it in June, one of the sharpest swings in chip stocks in decades.
Less than five months ago, semiconductor stocks were the hottest part of the market. Now the same sector is in oversold territory.
Key numbers
| Period | SOX distance from 200-day average |
|---|---|
| June 2026 | About 75% above, the widest since 2000 |
| Last Thursday | About 17% below, the widest gap since April 2025 |
| 2008 financial crisis | 49% below |
| 2000 dot-com bust | 52% below |
The current gap is also the second-largest since the 2022 bear market.
What does it mean?
The 200-day moving average tracks the long-term trend. Far above it, the market is overly optimistic; far below it, fear dominates. Going from +75% to −17% in five months is one of the sector's sharpest swings in decades.
The decline follows doubts about returns on massive AI investment and worries about data-center project delays.
Technical view
- Oversold does not mean a confirmed bottom; in 2000 and 2008 the index fell much further below its average.
- Still, gaps like this have often been followed by strong short-term rebounds.
- A move back above recent lows and a break of the bearish daily structure would be the first sign of recovery.
Market impact
Semiconductors carry heavy weight in the Nasdaq 100. Continued weakness feeds risk aversion, which usually favours the yen and gold over risk-sensitive currencies.
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