The Technology Select Sector Fund (managed by State Street Global Advisors) provides investors with effective exposure to the S&P 500 Tech Sector across both large and mid-cap stocks operating in the software & hardware, communications, semiconductors, IT services and electronic equipment businesses.
Technically, the ETF is testing the upper range of a declining channel pattern (see the blue and red parallel down sloping trendlines on the main chart as well as the insert), making it an attractive investment opportunity.
The ETF also remains above its key support level (see the black trendline on the main chart).
The ETF is trading just above its 200-day simple moving average of ~$132.50 - this is a positive indicator of the price trend.
Strong upside momentum, according to the moving average convergence divergence (MACD) indicator supports the bullish bias.
Technology stocks have been out of favour for some time. Most companies in the sector are now actively looking at ways to rein in costs and protect margins. We are expecting further announcements to the one made by Meta (FB) earlier this week - this could be a potential catalyst for the underlying companies and by extension, the ETF.
Share Information
| Share code | XLK |
|---|---|
| Industry | ETFs |
| Market capatalisation (USD) | 40.64 Billion |
| One year total return | -3.50% |
| Return year-to-date | 12.23% |
| Current price(USD) | 139.66 |
| 52 weeek high(USD) | 163.65 |
| 52 week low(USD) | 112.97 |
| Financial year end | - |
| Closing paragraph | The ETF has seen higher-than-normal trading activity of late. Expect moderate volatility going forward. |
Consensus expectations
(Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | N/A | N/A | N/A | N/A |
| Growth (%) | - | N/A | N/A | N/A |
| Dividend Per Share (USD) | N/A | N/A | N/A | N/A |
| Growth (%) | - | N/A | N/A | N/A |
| Forward PE (times) | - | N/A | N/A | N/A |
| Forward Dividend Yield (%) | - | N/A | N/A | N/A |
Buy or Sell Rationale
Technical Analysis :
Fundamental Analysis:
| Share Name and position | PBD - Stop Loss (Close the Position) | DE - Stop Loss (Close the Position) | BDRY - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 20.47 | 425.05 | 9.05 |
| Current | 19.10 | 395.93 | 10.57 |
| Movement | -6.7% | -6.9% | 16.8% |
| Summary text | The stock price reached our minimum threshold, and we exited the trade. | The stock price reached our minimum threshold, and we exited the trade. |
The stock is in an accumulation phase and is trading just below its 200-day simple moving average. Upside price momentum supports the bullish trend.
The take profit target is set at $12.00 with a trailing stop-loss at $8.70. We plan to exit the position around 21 June 2023. |
| Share Name and position | ATVI - BUY (Continue to hold) | KR - BUY (Continue to hold) | EXR - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 77.71 | 46.91 | 157.83 |
| Current | 79.09 | 47.18 | 157.37 |
| Movement | 1.8% | 0.6% | -0.3% |
| Summary text |
The price is forming a symmetrical triangle pattern and is currently trading above its 200-day simple moving average. Upside price momentum supports the bullish trend.
Our take profit target is set at $84.00 with a trailing stop-loss at $75.40. Exit the position around 30 June 2023. |
The price remains above its key support level and is currently testing its 200-day simple moving average. The bullish trend is supported by upside price momentum.
Our take profit target remains at $52.00 with a trailing stop-loss at $45.00. We plan to exit the position on 30 June 2023. |
The price appears to be retracing from the lower range of a linear regression channel pattern. The stock is testing its 200-day simple moving average, but upside momentum has halted - a concern to the bullish trend.
Our take profit target is set at $180.00 with a trailing stop-loss at $151.00. Exit the position around 3 May 2023. |
