Semiconductor stocks could see a sharp pullback in the short term, warns a trader.

Morgan Stanley analysts said in a Thursday note that “winter is coming” for the group, writing that sell signals piled up as chipmakers entered the late stage of their cycle.

The tech backdrop is also starting to flash warning signs, Miller Tobacco’s Matt Maley told CNBC’s Trading Nation on Thursday.

“We’re not ready to fly a big yellow or even red flag, but I’m a little worried,” said the company’s chief marketing strategist.

Looking at a chart on the VanEck Vectors Semiconductor ETF (SMH), Maley said the 25-stock basket “sees a short-term death cross” on its moving average convergence-divergence chart, a key momentum indicator.

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This type of Death Crossing has occurred eight times in the past year, “and each of those times has been followed by a pretty decent retreat and full correction several times,” Maley said.

“We’re starting to see that now. So that worries me, ”he said.

With the SMH itself now stuck in a relatively tight trading range, Maley focused on the chart of Taiwan Semiconductor, its top position and the world’s largest chip maker.

The stock appears to be testing its 200-day moving average, which it hasn’t done in over a year, Maley said.

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“It bounced off that level in July so that’s positive, but if it fails this time and breaks below, if Micron and these others pull it down below” [level], this will be a big warning flag for the group, “he said.

What was a warning sign for one trader was a buying opportunity for another.

“The short-term hiccups are an interesting long-term buying opportunity in my opinion,” said John Petrides, portfolio manager at Tocqueville Asset Management, in the same interview.

The demand of the global economy for chips is “very long-term supportive for thematic investors” and will continue with the expansion of 5G networks, machine learning and the production of electric vehicles, said Petrides.

He suggested investing through Invesco’s Dynamic Semiconductors ETF (PSI), a 32-stock fund with the highest weightings in Advanced Micro Devices, Qualcomm, Broadcom, Texas Instruments and Intel.

“Once we get through this kind of logistical nightmare that the world has been in for the last eight months or so and we should get through it for the next six months, I think the prospects for the chip sector are very good for the future, ” he said.

Disclosure: Petrides owns shares in Invesco Dynamic Semiconductors ETF (PSI). Certain Tocqueville Asset Management customers own shares in PSI.

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