In this post we will take a peek at multiple key assets associated with the technology industry and attempt to decide where it’s moving from there.
Technology Select Sector
Amongst the most typically used ETFs by investors looking for exposure toward technology businesses is Technology Select Sector. The exchange-traded fund offered investors exposure to 75 technology businesses from segments like communication equipment, IT services, storage, hardware and software. Taking a glance at the 4-year chart above, it’s possible to see the fund was trading inside an uptrend that is established and the bulls clearly are in control of its direction. It’s interesting to note, from a trader’s point of view, how the cost tested support of its 200 day moving average as well as ascending trendline multiple times (blue arrows). See how those levels prevented it from reversing within the past—that’s what most are going to be searching for again. Bullish traders, from risk management viewpoint, likely will set their stop loss orders right below the trendline and moving average trying to maximize the trade’s ratio of risk to reward.
Equal Weight Technology – Guggenheim S&P 500
An additional technology exchange-traded fund worth looking into includes the Equal Weight Technology Fund. The fund comprises of 69 holdings as well as has net assets of almost $900 million. Conviction of the industry’s uptrend might not be as solid as it initially appears and cracks might be beginning to appear, based upon the chart pattern above. The spotlighted above head-and-shoulders pattern includes a typical pattern utilized by traders to identify assets moving toward a pullback. Bearish trade signals will be generated as its price closes under the dotted supporting level referred to as a neckline. As the trend hasn’t reversed yet, the latest price action close to the patterns neckline ought to be a cause for being concerned for most bulls. Only time is going to say if the CES presentations are going to be enough in order to send the cost higher from there.
ETF- Guggenheim China Technology
Not every investor is interested in technology from North American businesses and might be tempted to search overseas for any opportunities. Glancing at the ETF Guggenheim China Technology, it’s possible to see that the technology sector in China currently is faced with more resistance than the counterparts in North America. The bulls, therefore may want to stay on the sidelines until the cost closes above combined resistance of the trend line as well as the 200 day moving average -- that are trading close to $36.31.