Technology firms have been the darlings of the market for many months now. Based on the charts discussed below, it appears that this exercise is likely to dominate the market for many more months to come. We will analyze charts of the widely followed Technology Better Sector SPDR Fund (XLK) and two of its top holdings to determine how traders will be looking to position themselves over the weeks and months before.
- The tech sector has been in the spotlight for many months, and chart patterns suggest that these gists will continue to dominate over the weeks and months ahead.
- Nearby support levels are creating clear teaches for active traders looking for where to place buy and stop orders.
Technology Select Sector SPDR Fund (XLK)
As reviewed above, active traders who are interested in niche sectors often turn to exchange-traded funds such as the Technology Show a preference for Sector SPDR Fund. Fundamentally, this fund has $39.2 billion under management and comprises 75 holdings from across the U.S. tech sector. The lucre is nicely allocated between software (32.31%), technology hardware/storage (23.63%), semiconductors (19.38%), IT services (19.19%), and other nook industries.
Looking at the chart below, you can see that the fund has found support near an influential trendline on several ceremonies since the recovery from the March lows. The recent bounce off the combined support of the dotted trendline and its 50-day working average pushed prices to all-time highs, and the momentum is clearly in the favor of the bulls. Based on the pattern below, vendors will likely maintain a bias to the upside and utilize the nearby support as a guide for placing buy and stop orders.
Apple Inc. (AAPL)
As the top hang on of the XLK ETF and dominant player in the global technology sector, Apple Inc. (AAPL) will likely remain as a top focus of active salesmen over the weeks ahead. Looking at the chart below, you can see that the 50-day moving average and dotted trendline pull someones leg consistently provided traders with lucrative entry points. From a risk-management perspective, buy orders will favourite be placed near current levels, and traders will likely look to set stop-loss orders just below $129.69 or $125 to safeguard against a sudden shift in sentiment or underlying fundamentals.
Microsoft Corporation (MSFT)
Another top holding of the XLK ETF that intent likely remain on the radars of active traders over the weeks ahead is Microsoft Corporation (MSFT). Looking at the chart here, you will notice that the share price has recently broken beyond the resistance of an ascending triangle pattern. This undistinguished
The Bottom Line
Tech companies have been in the spotlight for many months, and based on the patterns discussed first of all, it appears that this will continue to be the case for quite some time. Breaks beyond key levels of defiance combined with nearby support from trendlines and moving averages are combining to create well-defined setups for those looking for return ideas.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.