Stockchase Opinions

Carter Worth Technology Select Sector SPDR Fund XLK-N BUY Aug 13, 2021

The 10-year yield His technical analysis: the 10-year yield has moved down since its 1.77% high earlier this year then fell down to 1.2% in mid-July, but when it rallied to 1.38% the yield hit a ceiling and closed today at 1.28% which disappointed those who expected it to rise higher. The popular belief of it hitting 2% by year's end won't happen. Given the yield, tech looks good. The XLK chart shows an uptrend since Dec. 2019. Likes this sector. Buy it.
$154.990

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BUY
Allan Tong’s Discover Picks To compare, the S&P outperforms XLK by 3%. However, if we consider the past month, the roles are reversed, with the S&P up 3.3%, but the XLK popping over 7%. XLK pays a 1.02% dividend, which isn’t bad for tech, and it charges a low 0.13% MER. XLK trades at a 32.6x PE, which falls exactly between Apple’s 29.2x and Microsoft’s 35.2x. If you want one-stop U.S. tech shopping that includes the best tech stocks to buy, XLK is the place to go. Read 3 Best Tech Stocks to Buy Now for our full analysis.
HOLD
In the US tech sector, granddaddy of ETFs. Seasonal period takes a brief hiatus, and then picks up again until late January. Performing well. He was overweight tech, but has taken that back as he transitions to the new year. Rotation might take funds away from tech towards the end of January. We're still in the window, but it's getting late to issue a "buy". If you're a trader, there could be some opportunity for the next month or so.
BUY ON WEAKNESS
We will see more enterprise spend and lower growth in the next few years. You want to be in companies that continue to grow earnings and generate free cash flow and buy back stock. You must distinguish between types of tech companies--those with these characters and those that don't. She will add to big tech (Apple, Alphabet, Amazon, Adobe and Meta).
BUY
options People are betting on a bit of comeback by buying the May 146 calls trading at $141.50.
DON'T BUY
The valuation has no room to go up. The best EPS growth will be 8-12%. You can do better outside tech. Also, the sector that performed the best in the last bull market is not the best one in the next bull run, history says.
COMMENT

The tech sector is trading at 28x forward PE, back to the pre-Covid peak. Tech trades at a 45% premium to the overall market while the 10-year average is 9% premium. During the tech bubble it was a 53% premium. He gets the AI enthusiasm, but doesn't understand the tech disconnect from higher rates. The Fed has said it will increase rates. Tech stocks are expensive. Tech outflows have been the highest in the past 10 weeks. We'll test 4,200 on the S&P and could run further if it breaks above that. If it doesn't, we'll see.

BUY

A tech ETF and a good way to play tech. This has done well this year. With earnings now, this could do even better. We're entering strong seasonality for tech which could boost the wider market. Keep an eye on Apple's earnings on Thursday. Tech is good, at least short term.

TOP PICK

Sector is performing well. Small pullback from October to November, which is good as it sets up a rally. Tech starts to perform well at this time of year into January, seeing some momentum, can do well for the next few months. Rising bottoms, a very positive pattern. Breaking out from the previous level. That all shows an ascending triangle.

DON'T BUY
technical analysis by Jessica Inskip re: volatility, strong job market and higher inflation

This week, the market nearly broke below all key support levels, including the XLK (tech index). It looks very negative now, showing a sell signal. Inskip fears XLK could fall to $225, the next floor of support and the 26-week moving average. Bearish.