Well Rested Or Out Of Steam?

Technology has had every reason for a well-deserved breather. Keep in mind it was the best-performing major S&P sector in 2019-2020 gaining almost a combined double. It followed up in 2021 with the XLK the fourth best group rising another 34.5% (for eight consecutive years the XLK has outperformed the S&P 500, and this year so far in 2022 is trailing the widely followed benchmark). Below is the chart of the QQQ and one can see it is at an inflection point here. It gingerly reclaimed its 50-day SMA Monday intraday, a line it was underneath since mid-April, before recording a bearish engulfing candle to CLOSE below it. The top holding in AAPL recorded a bearish engulfing candle at the familiar 150 number, which was support in mid-March and resistance in May and June. MSFT for the second straight session was rejected at its 50-day SMA. AMZN for the third time in as many weeks is being repelled in the 117 area. TSLA has hit a rock wall at 750 since early June and GOOGL with the split here fell more than 2% today. Not exactly the best performance you would like to see from the ETF’s top 5 holdings. The bulls need to make a stand right here as seen on the chart below.

This article requires a Chartsmarter membership. Please click here to join.