Major indices finish lower amid GE earnings disappointment >>> READ MORE

Expect Techs to Pause, Then Push Ahead

XLK is up against a major resistance point


Click to Enlarge
Technology stocks as measured by the Select Sector Technology SPDR (NYSE:XLK) are at a major resistance point and flirting with a breakout above a five-year resistance line.

The XLK exchange-traded fund has rallied almost 100% off the early 2009 bottom and 8.2% since the Dec. 20 lows. That now brings the XLK right to the top of the multi-year downtrend resistance and 2011 resistance line, currently at $26.70.

Click to Enlarge
Given how far stocks have rallied during the past month, it is likely equities will take a little breather here before ultimately heading somewhat higher and leading to a truer breakout in the XLK.

Last night’s earnings announcements out of Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), Google (NASDAQ:GOOG) and others have the technology sector trading mixed today and stalling somewhat. Should the broader market along with technology enjoy a little breather in coming days/weeks, we would be wise to watch the price action closely. A healthy correction should then eventually lead to a breakout in the XLK — a major tell worth taking note of for large-cap technology stocks.

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC