Trading Technology and Telecom Stocks
The rotation into this sector was already underway before July 30, and five of the 10 stocks I profile today have become overbought, according to their daily charts.
The computer and technology sector is 4.5% overvalued, while the utility sector is 13.4% overvalued. I mention this because my benchmark for tech sector is the Technology Select Sector SPDR Fund(XLK) , which contains 79 equity components and several stocks that ValuEngine considers utility stocks.
The rotation into the XLK off a June 4 low has six of the 10 stocks I am profiling trying to trade back up to their year-to-date highs set between March 27 and May 3, which matches the pattern of the XLK.
>>Also See: Stocks in SOX: Sector Rotation Shifts to Chips
The daily chart of the XLF is overbought, as the ETF attempts to trade up to its April 3 high, which was its highest point since April 2001.
From its August 19, 2011 low at $22.47 to the April 3 high at $30.62, the XLK rose 36.3%. It has gained 136.6% since its November 2008 low of $12.94. My annual value level is $25.48 with an annual pivot at $29.93 and monthly and quarterly risky levels at $31.10 and $32.18.
Source: Thomson Reuters
The above table shows data from ValuEngine.com covering the top 10 of the 79 components of the XLV, listed by weighting from top to bottom.