US Sector Showcase: "High" Tech stocks in more ways than one!
|Remember the so-called "Trump Trade"? Both in terms of political developments and price action, it seems like November 8th was about a half-decade ago, not just five months ago. When it comes to the stock market, traders rushed out to buy industrial, material and financial stocks, while selling health care and technology stocks.
The bearish health care thesis was fairly straightforward, given the Republicans' promises to "repeal and replace" the current health care law, but the explanations for the drop in tech stocks was always a bit more tenuous. Some traders argued that Trump's tough-on-immigration stance could deprive technology companies of the highly-skilled foreign workers on H1-B visas, while others (ourselves included) believed the post-election pullback in tech stocks was simply caused by investors taking profits the strongest names in their portfolios to chase "The Next Shiny Thing," namely financial and industrial stocks.
Regardless of the explanation for the initial drop, the tech sector has come roaring back of late. Though still far from the lofty "Tech Bubble" peak at the start of the millennium, technology stocks recently hit their highest levels relative to the broader stock market in 15 years.
Technology stocks have hardly been slacking on an absolute basis either. As the chart below shows, the technology sector ETF (XLK) made a run at its Tech Bubble peak near 54.00 earlier this month, and after a pullback, XLK is showing signs of bouncing off its 50-day MA so far this week:
Given the strong relative and absolute bullish trends in the tech sector, we'll continue to look for buying opportunities in the days and weeks to come. Top holdings in the sector include AAPL, MSFT, FB, GOOGL, T, INTC, VZ, CSCO, V, IBM, and ORCL, all of which are in our US equity universe.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.