Look Who is Back
Igor Manukhov - Mar 31, 2023
The technology sector is climbing back up to the top of the performance mountain. Rising interest rates and slowing down momentum could put the breaks on. However so far it’s a party like it’s 2020.
After almost 2 years of hiatus, the technology sector is starting to outperform again. Currently the NASDAQ index is gaining relative strength against the S&P500 (green line on the top). What’s encouraging to see is that the NASDAQ itself is trying to break a downtrend (black line in the middle).
Due to an incredible run from October of last year, I would allow for some pullback in the NASDAQ. Notice how momentum is slowing down (pink line on the bottom panel with RSI indicator).
I have outlined two previous times when this set up emerged (red lines on the chart) and in both cases Nasdaq pulled back.
I would not chase it at this point and be patient.