From Chris Kimble: Technical analyst explains why a key level in a popular technology-focused ETF should be watched very closely as we approach end of year.
Some feel assets or charts have memories. If this is true, Tech bulls might be hoping that a certain level is forgotten!
The above chart looks at Tech ETF (XLK) on a monthly basis, since 1998. XLK peaked at the 2000 highs at (1), where a bearish reversal pattern (bearish wick) took place. This monthly pattern ended up being the monthly high before the ETF declined over 80%.
17-years later, XLK finds itself testing the 2000 highs again this month at (2). Tech bulls wish for the New Year… They want this level to be forgotten and see a upside breakout.
Tech bulls would get a caution message if selling pressure would start and support would give way at (2)! Stay tuned.
The Technology Select Sector SPDR Fund (XLK) was unchanged in premarket trading Wednesday. Year-to-date, XLK has gained 34.09%, versus a 21.98% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Kimble Charting Solutions.