XLK, Right shoulder on the way?Sector rotation time.
Technology sectors look set for retracement (no idea how deep it will be), at best 9 months of consolidation
a few zone have been identified
XLK trade ideas
XLK Corrective wave ASimilar pattern for XLK, a sideways triangle is in development as the largest intraday rallies typically occurs in short term downtrends like these.
XLK - Ascending Broadening Wedge - Correction Incoming?0. Might be seeing a 15 percent correction in the XLK ; She may overshoot;
An ascending broadening wedge is a bearish chart pattern (said to be a reversal pattern). It is formed by two diverging bullish lines.
An ascending broadening wedge is confirmed/valid if it has good oscillation between the two upward lines. The upper line is the resistance line; the lower line is the support line.
Each of these lines must have been touched at least twice to validate the pattern.
NB: a line is said to be "valid" if the price line touches the support or resistance at least 3 times.
This implies that the ascending broadening wedge pattern is considered valid if the price touches the support line at least 3 times and the resistance line twice (or the support line at least twice and the resistance line 3 times).
An ascending broadening wedge does not mark the exhaustion of the buying current, but the sellers’ ambition to take control. The divergence of the two lines in the same direction (increase in price magnitude) informs us that the price continues to increase with movements that are increasingly high in magnitude. The buyers manage to make the price rebound on the support line but lose control after the formation of a new highest point. The lowest point reached during the first correction on the ascending broadening wedge’s support line forms the support. A second wave of increase then occurs with more magnitude, signalling the loss of buyers' control after a new highest point. A third wave is formed afterwards but buyers lose control again after the formation of new highest points.
During the formation of an ascending broadening wedge , volumes do not behave in any particular way but they increase strongly when the support line breaks.
XLK Butterfly Spread UpdateUnlike the S&P and NDX, XLK remains strong making new highs.Our +ve Delta Butterfly has moved ITM, look to hold the butterfly spread as long as the wave count still remains valid.
XLK - Tech Sector Rolling OverBREADTH
1. More and more stocks in the sector are going on Point & Figure sell signals showing supply is gaining control.
2. $VXN (NDQ volatility) is making higher lows despite higher highs in the Nasdaq.
3. The hourly chart is showing a rising wedge into the underside of the 20MA (120MA displayed).
PRICE
4. Tech has been running up against its weekly upper bollinger band for a couple of months now. The upward bursts are getting shorter and shorter.
5. Currently, price is experiencing very churny, choppy action, threatening to make 100% retracements to lows.
6. Stockcharts SCTR score (strength meter) is 46.4 indicating underperformance.
EXTRAS
7. The positive money flows from post-election hedging option decay has gone away with Jan OpEx.
8. Index iVol is pinned until Wed morning when the VIX futures contract rolls over. Then there is serious potential for an iVol bid up across the broad market.
XLK New Butterfly Spread Setup , Wave (5) Bullish Unlike the S&P and NDX, XLK failed to make new highs. This could be a sideways triangle in development. We are only using this count as a vehicle to reach 136 and then will assess at that point. Wave Count Invalidation at 125.3. Looking to establish a +ve Delta Butterfly, exact trade execution in Video Update.
XLK New Butterfly Spread Setup , Wave (5) Bullish XLK corrective (A), (B), (C) almost complete with a potential rebound into completing terminal wave (5). The hourly chart shows XLK has to stay above of 125 wave coin invalidation for this bullish wave count to remain valid. Exact trade execution details in video update.
Yesterday's Long Liquidation & Gamma BathPretty strong divergences had shown up using top 4 SP Sector ETFs as custom index at the open, trade signal was the changes in zero lag MA and MACD
RectangleLong entry would be above red resistance line and XLK went over that today with a high of 128.14. A confirmed up trend is also a good idea as price can get sucked back in to the horizontal channel. There is also a possible rising and narrowing wedge..There is also an ascending triangle with the same break out level as the rectangle.
Rectangles are a period of consolidation and are continuation patterns as a rule. Mid rectangle (MR) can be a stop whichever way price goes.
Ignore pink line..I was planning to draw the ascending triangle but it runs right along the top rectangle trendline, so looked confusing (o: I can not go back and change it now.
Not a recommendation.
Top 10 Holdings
Apple Inc
23.08%
Microsoft Corp
19.54%
Visa Inc Class A
4.28%
NVIDIA Corp
3.99%
Mastercard Inc A
3.58%
PayPal Holdings Inc
3.03%
Adobe Inc
2.77%
Salesforce.com Inc
2.70%
Intel Corp
2.48%
Cisco Systems Inc
2.20%
Relative Strength: Tech is topping out vs. financialsChange in leadership from tech (growth) to financials (cyclical)
Tech sector showing weakness despite gains on election dayWhen comparing tech focused ETFs/indexes, namely $NDAQ and $XLK, we can see that $SPY has recently been outperforming them. My theory is that this is an unusual case and a sign that tech stocks are near tops.
Given that I did not receive the dip I wanted, I have difficulty putting on a short position on tech. There is also the factor that the highs have not been truly swept yet.
Just something to keep an eye on.
$NDAQ/$SPY
$XLK/$SPY
For options plays, it would appear leaps for $NDAQ would be ideal, while short term plays on $XLK would work out. $NDAQ is quite illiquid.
Tech Rally resumesXLK current wave (2) correction is setting up for a terminal move into wave (3) targeting the 129-135 range.We are operating under the assumption that wave (2) should not break below 111 setting up a same degree wave 5 rally is in progress targeting 130.
XLKrevisiting the exact area you would expect it to....key now is to watch it's next move....below current support and no interest being long.
XLK showing bullish signal at 65 minutes chartNot that I am bullish on XLK but indeed I am quite bearish at this point. However the 65 minute chart does show a RSI trend break and MFI showing breaking up the 0 line which mean trend bullish, even though these two signals need confirmation.
Cautious with positioning with these signals is what I want to convey.
Disclaimer, this is only for entertainment and education purposes and doesn't serve by any means as a buy or sell recommendation.
Personally I hold both long term long positions and occasionally short term short position, for disclosure purpose.
XLK trend line on edge of being brokenXLK breaking trend line on 60 minutes and lower time frame. 2 hour still holding up OK.
Qs are holding up still. CLosely watch the unfolding.
Bearsih divergence + broken trend line is NOT a good combo for XLK at this moment. May reverse and continue higher but this is a warning.
Disclaimer, this is only for entertainment and education purposes and doesn't serve by any means as a buy or sell recommendation.
Personally I hold both long term long positions and occasionally short term short position, for disclosure purpose.
30 minutes view for XLKShowing this is a great shorting opportunity that might disappear quickly...
see my previous post for RR setting.
In this kind of choppy phase, momentum indicators are all wasted. use volume based indicators such as OBV and MFI.
Disclaimer, this is only for entertainment and education purposes and doesn't serve by any means as a buy or sell recommendation.
Personally I hold both long term long positions and occasionally short term short position, for disclosure purpose.
entering short XLKPre market gap up.
Divergence obvious. volume based indicator MFI up and OBV down. so this is a half half short trade. set stop at right above hullma with RR of 3.
Looks like a worthy trade to me.
let's see how this will play out.
Disclaimer, this is only for entertainment and education purposes and doesn't serve by any means as a buy or sell recommendation.
Personally I hold both long term long positions and occasionally short term short position, for disclosure purpose.
