Time to buy the dip in tech stocks, Fundstrat technical strategist says
Technology’s tough week may come with a silver lining: an attractive buying opportunity, according to Fundstrat. Technical strategist Mark Newton noted that tech stocks are now at prices suitable for investors to buy the dip. “It looks too early to give up on Technology,” Newton wrote Thursday night in a note to clients. “Despite the weakness this week … within the Magnificent 7 , the Technology sector as a whole has not broken support.” Tech has been under pressure this week amid concern about the valuation of some leading companies in the group. The Technology Select Sector SPDR fund (XLK), which tracks the S & P 500 tech sector, is down 3.8% this week, through Thursday’s close — on track for its biggest weekly decline since April 4. XLK 5D mountain XLK 5-day chart Leading the way lower in tech are: Super Micro Computer : down 22.4% for the week Arista Networks : down 15% week to date Synopsys : down 12.7% this week Palantir Technologies : down 12.7% week to date Magnificent Seven members Nvidia , Meta Platforms and Microsoft also fell this week. Those declines put pressure on the broader market, as the lion’s share of this year’s gains comes from the artificial intelligence trade and the group accounts for a disproportionately large share of the benchmark stock index. The S & P 500 is down 1.8% for the week, on pace to snap a three-week advance. Still, Newton doesn’t expect the latest downturn to last long. “The ‘Mag 7’ itself is in stronger shape than the broader Technology sector, as stocks like GOOGL and AAPL have shown precious little damage.,” Newton said. “Overall, I expect that XLK … likely holds trendline support and turns back higher over the next week.”
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