Watch the Double Top in Tech ($XLK)

January 30, 2015
By Vlad Karpel

The Tech Big Wigs have reported, Apple ($AAPL), Microsoft ($MSFT), Facebook ($FB), and Google ($GOOGL). All but Microsoft have bounced to the upside after announcements. It begs the question…What now?

I took a look at the action in the Technology Select Sector ETF ($XLK) and the chart action has been choppy, to say the least. Firm resistance is established at $41.50. That has been challenged twice this month, first on 1/9/15, and then again on 1/23/15, only to be stopped and subsequently pullback to the $40 level. The $40 level was broken early in the session but was able to bounce and finish the day in the green.

Our Seasonality Chart is predicting that this large-cap tech ETF ($XLK) could trend lower in the next 30 days with an 89 percent probability. Tread lightly and pay close attention to the $41.50 level on $XLK. If it cannot break through that level, it could be a catalyst for nervous longs to cut loose. Then look to the bears to jump all over that fear.

Have a good trading day!

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