With market conditions improving, the tech sector is back in favor, and their positive chart patterns and superior relative performance analysis make these leading equities among the best ones to buy.
The improvement in the technical outlook for the Select Sector SPDR - Technology (XLK) discussed here last Friday turned my focus back on the technology sector. If the worst of the market’s decline is over, then those tech stocks with the best long-term charts and superior relative performance analysis should be a part of most portfolios.
The proposed bailout of Spanish banks has led to further optimism for stocks over the weekend, as has the better-than-expected economic news out of China. Stock index futures were sharply higher in overnight trading but have since given up some of the gains. Still, it is the close on Monday that will be most important.
A positive close, and more importantly, positive Advance/Decline (A/D) numbers on Monday could be enough to confirm the bottom formations for the A/D lines. Two of the tech giants, Intel Corp. (INTC) and Microsoft Inc. (MSFT), have been among my favorites since late last year.
Apple Inc. (AAPL) is set to announce product updates at today’s developer conference in San Francisco. AAPL came within 0.5% of my buy level from May 7 before rallying sharply and it now looks unlikely that the May lows will again be tested. Therefore, aggressive investors will need a new strategy for buying Apple.
Chart Analysis: The Select Sector SPDR - Technology (XLK) dropped as low as $27.04 last week before closing at $28.33.
Apple Inc. (AAPL) briefly dropped below its 20-week exponential moving average (EMA) four weeks ago, coming very close to the weekly Starc- band before rallying almost $60. AAPL makes up 18% of the XLK portfolio.