The technology-heavy Nasdaq index has been greatly outperforming the S&P 500, as investors flee to the relative safe haven of technology stocks. However, tech stocks have gotten fairly expensive, and it's hard to see more investors piling into companies like Apple or Microsoft as these companies close their retail locations. I think tech will continue to outperform other sectors like banks, travel, and energy, but it's still probably due a good 10% pullback from here. In terms of technicals, we got a falling star candlestick on the weekly chart and what looks like a fairly large bearish divergence. The daily chart also shows bear divergence:
Tech might return to strength during the mid-July earnings season. Tech companies tend to outperform analyst earnings expectations, and early guidance has so far looked good. Meanwhile, there could be slaughter in other sectors as companies loaded with debt offer weak guidance for the year ahead. Thus, I will treat a Nasdaq pullback in the next two weeks as an opportunity to buy into earnings season. I'll probably focus on some tech sector-specific ETFs like SOXX and EWCO.
Tech might return to strength during the mid-July earnings season. Tech companies tend to outperform analyst earnings expectations, and early guidance has so far looked good. Meanwhile, there could be slaughter in other sectors as companies loaded with debt offer weak guidance for the year ahead. Thus, I will treat a Nasdaq pullback in the next two weeks as an opportunity to buy into earnings season. I'll probably focus on some tech sector-specific ETFs like SOXX and EWCO.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.