IXIC
This week for tech stocks has been rather bullish. With many good catalysts the week before which aided this week's rally, it has really pumped some optimism into the market. With important bullish points having been penetrated in the daily graph such as the 13700 area. Having surpassed this point with no red days has been a very good indicator that there is steam now re-entering the technology sector. However, there is one thing to be cautious of and that is overextension.
Although the upward momentum has been very positive, it has now landed the index in a position where it can move too quickly too fast and becomes over-bought. In this situation, I would expect the price to bounce back to its mean of roughly 13500 before once again making a strong move towards the upside.
So I guess the most important thing to watch out for particularly in the technology sector is, 1 that the index isn't too over-optimistic and pushes past the 14000 points too quickly and 2, that there aren't any real changes in interest rates that may drive investors out of equities and into other sections of the financial markets.
Happy weekend everyone! I hope your trading has gone well for this week.
- LMF