Tech stocks were underselling Tuesday following report that the EU hitting Google with a record $2.7 billion fine for violating antitrust rules. The Technology Select Sector SPDR ETF (XLK) fell below the 8-month rising trend line, down 1.64 percent to 55.08 – its lowest closing price since May. Now the question is whether this is a pause that refresh or a beginning of something worse? According to our “U.S. Market Trading Map”, there could be more pains ahead for the ETF. Below is an update look at a trade in XLK.
The graphic below is from our “U.S. Market Trading Map”, show the near-term technical bias and trading ranges. 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 1.2 – Technology Select Sector SPDR ETF (weekly)
Our “U.S. Market Trading Map” painted XLK bars in yellow (neutral). After carved out an all-time high in early June, XLK rolled over. Tuesday’s massive selloff pushed the ETF below November rising trend line, signified a bearish breakout. Breadth is not favorable over the near to intermediate term as…Click here to read more.
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