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The old saying goes too “never short a dull market”. And looking at the XLK WEEKLY chart below shows little movement, now just 3% off most recent all-time highs and falling 5 of the last 6 weeks. That could be the bullish take. Bears would state this indicates fatigue and churning action. Notice the doji candle 3 weeks ago that is often a good sign of at least exhaustion, and worst a change in the prevailing direction. Many would say that AAPL is the culprit, and with a good point as it makes up nearly 20% of the ETF, and it did display good action toward the end of last week, up more than 4% Thursday (easily its best advance of 2024), and Friday showed excellent relative strength up almost 1% with the Nasdaq off 1.6%. It did decisively recapture the 21 day EMA, and notice it is a rare name showing positive RSI divergence (a bit misleading as that was able to occur because of its prior outsized weakness). My feeling about the XLK is a visit to its 21-day WEEKLY EMA will give it a chance to reset, as it did in late October 2023. That would be roughly another 3% haircut from here and put it in a 5-6% correction mode, which could then after the rest give it stamina for the seasonally strong second half of the year.

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