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.