Week 18 Technology Trending and Performance
For the Technology sector, since it has such a big influence in the markets, I also track some of the big individual stocks. I do not usually trade them though except when I traded TSLA few weeks back to the downside.
Trending Heat Map (ETFs)
Most of them are poking their heads out of the water but not coming out of the water. What I mean is the price movement is trending above their 10-day and 20-day moving averages, but they are not turning short-term bullish yet as per my system.
Nonetheless the picture has more green cells than before and QQQ did turn perfectly bullish again. That does not bode well for my short position. But when we look at the chart, we can see how bunched up the trendlines are. Here is the 3-month chart of QQQ:
So, I am not particularly worried about my short position and will do what I always do if my trade turns out to be on the wrong side. Take it off.
Trending Heat Map (Big Tech)
They mostly look better than before as well. So, I would say technology has to make a decision soon whether they continue up or the good times for now are over. Either the rest of the market will bring it down or this sector will drag the rest of the market up.
Performance (ETFs)
Crypto stocks BITQ are up +93% for the year so far thanks to the boom in Bitcoin price. Other than KWEB, all of them are positive for the year.
Performance (Big Tech)
There are many ways to look at the table. One way would be to see that 10 out of 18 stocks were down in April and so far, in May, 9 out of 18 are down. The other way to look at it is to see that only 3 out of 18 are down for the year-to-date. It all depends on time frames.
I have mostly made my money this year playing the tech ETFs to the downside. I am not saying that has been the right strategy. It is just what has worked for me. On a go forward basis, my approach will change if the sector is truly able to get out of the 2 steps forward and 1 step back or it stays that way.
The QQQ has turned perfectly bullish as of now. If the trend remains intact and, in fact, the QQQ is able to bring the rest of the market up, then I will start playing the market accordingly to the upside. But if the rest of the market continues to act poorly and ends up bringing the QQQ down, then I will continue to play the market to the downside.
I will keep noting the changes here.