Having the VanEck Vectors Semiconductor ETF (SMH) end at a record weekly closing high last week is certainly a bullish sign on its own. This is true not only for the semiconductor and tech industries but also for the U.S. equity market, given that SMH is leading the wider market into new highs.

The Nasdaq 100 Index also closed at a new weekly closing high last week. Overall, SMH is in a clear long-term bullish uptrend with price above both the 21-week exponential moving average (EMA, blue line) and the 55-week EMA (orange line) trend indicators.

Strength last week has the possibility to see the semiconductor ETF continue to higher prices and spread to other sectors of the U.S. equity market. Nevertheless, SMH first needs to exceed last week's high of $217.14 and close above it on a daily basis to confirm the sustainability of the move into higher highs.

Chart showing the share price performance of VanEck Vectors Semiconductor ETF (SMH)
TradingView.com

At the same time, there is a potentially bearish rising wedge that has occurred in the chart of SMH. The two rising lines across the top and bottom of the price pattern can be seen in the weekly chart above, where both lines are heading toward each other and cross in the future. When taking the wedge pattern into consideration, we would not only need to see a decisive daily close above last week's high to confirm strength of last week's rally, but also above the top resistance line of the wedge. At that point, the bearish potential of the rising wedge would be negated. 

Alternatively, price stays within the borders of the wedge, and the possibility of an eventual resolution to the downside persists. You can see on the weekly chart that the 21-week EMA is just about to merge with the lower line of the wedge. It can therefore be used as a proxy for the price represented by the line.

Note that the prior swing high for SMH reversed at a 127.2% Fibonacci extension of the 2018 decline in July and that last week's high reached the 127.2% extension of a more recent decline. Therefore, short-term resistance could be seen again leading to some degree of pullback.

If last week's breakout continues higher, then watch for SMH at least to reach the next key resistance zone of around $134.96 to $137.61. This zone is identified by the confluence of several Fibonacci projections and extensions of prior swings.