Because of the spike in demand for services as many operations transition online, the coronavirus epidemic has brought many of the world’s top technology businesses into the limelight. While investors are worried about a trend reversal due to significant sell-offs across several asset classes, active traders who use trend trading tactics are looking to long-term charts for a wider view. In this article, we’ll look at weekly charts used to follow the status of global technology stocks and attempt to predict how trend traders will position themselves in the next months.
iShares Global Tech ETF (IXN)
Most trend traders who seek to forecast the direction of a certain global market sector will go to exchange-traded funds such as the iShares Global Tech ETF (IXN).The weekly chart below shows that the fund’s price has dropped near the long-term support of an important trendline and its 200-week moving average. The underlying uptrend’s momentum remains strong, and the recent dip seems to have presented an excellent purchasing opportunity for those with a long-term outlook.
Microsoft Corporation (MSFT)
Microsoft Corporation (MSFT) is the largest position in the IXN portfolio, accounting for 17.88% of its weighting. The five-year weekly chart below shows that the stock’s price has been trading inside a well-defined channel pattern. The recent recovery off the lower support level will most likely be seen as proof that the bulls have regained control of the momentum, and traders will anticipate the upswing to continue until the price closes many consecutive days below the lower trendline.
Visa Inc. (V)
Visa Inc. is another corporation focusing on technology, especially the digital revolution of financial services (V).Visa is ideally positioned to gain from the transformation to electronic payments as the global leader in enabling electronic financial transfers. As seen in the weekly chart below, the price of Visa stock has been trading in an incredibly strong uptrend for the last 7.5 years, providing support on several pullbacks. The recent recovery off of support levels indicates that the bulls are still in charge of the momentum and that prices may be prepared to resume their ascent.
The Bottom Line
Global technology is one of the primary areas that has attracted the attention of long-term trend traders in recent weeks. According to the weekly charts shown above, the underlying uptrend is still in place, and the nearby support might function as a stimulus for a further move higher.
Casey Murphy did not hold any of the assets listed at the time of writing.
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