Tag Archives: Citi

Trading Strategy – Technology Select Sector SPDR

Stocks ended in positive territory for the third-straight session Monday, as investors geared up for the start of the second quarter earnings season.

Intel (INTC) slumped to lead the S&P 500 laggards Monday following a bearish note from Citi.  In addition, Evercore lowered its rating on Intel to “underweight” from “equal weight” and cut its price target to $20 from $22.  Shares of Intel dropped 3.6% while the Technology Select Sector SPDR (XLK) fell -0.06%.  Below is an updated look at a trade in XLK.  The ETF has been on a tear in recent days and currently at an interesting spot.

The graphic below is from our “U.S. Market ETF Trading Map”, which show the near-term technical bias and trading ranges for XLK.  As shown, the underlying is in a short-term bullish trend when the price bars are painted in green.  The underlying is in a short-term bearish trend when the price bars are painted in red.  The yellow bars identify period of neutral or sideways trading pattern.  Additionally, the light-blue shading represents the short-term trading range.  A move above or below that range is considered overbought (as represents by the red shading) or oversold (as represents by the dark-green shading).  Readings above or below the red and green shaded areas are considered extremely overbought or extremely oversold.

Chart 1.1 – Technology Select Sector SPDR (daily)

As indicated in the above chart, our “U.S. Market ETF Trading Map” rates XLK as a Hold.  XLK moved up to test resistance at the June bearish downside gap after the June correction tested and respected support at the bottom of its short-term trading range.  Monday bearish engulfing candlestick is a clear indication of supply overwhelming demand…Click here to read more.

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