Although this sector has underperformed so far this year, MoneyShow’s Tom Aspray takes a technical look at several of tech stocks to see if they can pull the sector out of its slump.
Last week’s lower close has left many of the key US markets on the verge of stronger sell signals but the global markets are starting off the week on a very positive note. Japan revised its first quarter growth to 4.1% as the Nikkei 225 gained almost 5%.
This could complete the correction in the Nikkei as it has reached the buy levels outlined last week. European stocks are strong as the Dax Index is up well over 1% in early trading with the S&P futures showing double digit gains.
Of course it will be the close Monday that is important as the daily charts reviewed in the Week Ahead column need two consecutive strong closes with strong A/D ratios to indicate that the correction is really over.
The DJ Technology Index has been lagging the overall market all year as it is up only 6.5% this year versus an 11.5% gain in the Spyder Trust (SPY). The technology sector is trying to once again become a market leading sector but will the reaction to this week’s earnings from some well-known tech stocks push this sector into a leadership role?
Chart Analysis: The weekly chart of the DJ Technology Index (DJUSTC) shows that the downtrend connecting the 2007 and 2012 highs, line a, was tested two weeks ago.
Adobe Systems Inc. (ADBE) reports its earnings after the close on June 18. It surprised the market in the last quarter when it beat forecasts by 10%.
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