{"id":194034,"date":"2023-07-27T04:24:48","date_gmt":"2023-07-27T08:24:48","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=194034"},"modified":"2024-01-24T12:13:03","modified_gmt":"2024-01-24T17:13:03","slug":"chart-advisor-tech-revisits-the-scene-of-the-crime","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/chart-advisor-tech-revisits-the-scene-of-the-crime\/","title":{"rendered":"Chart Advisor: Tech Revisits the Scene of the Crime"},"content":{"rendered":"\n<p><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>By&nbsp;<\/strong><\/a><strong><a href=\"https:\/\/www.investopedia.com\/contributors\/54841\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>J.C. Parets<\/strong><\/a>&nbsp;&amp;&nbsp;<a href=\"https:\/\/get.allstarcharts.com\/?utm_source=chart-advisor&amp;utm_campaign=fwd_chartadvisor&amp;utm_term=27774019&amp;utm_medium=email\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>All Star Charts<\/strong><\/a><\/strong><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-wednesday-26th-july-2023\">Wednesday, 26th July, 2023<\/h2>\n\n\n\n<p><strong>1\/ Tech Revisits the Scene of the Crime<\/strong><\/p>\n\n\n\n<p><strong>2\/ Rotation Hits Commodities<\/strong><\/p>\n\n\n\n<p><strong>3\/ Oil Services Remain Resilient<\/strong><\/p>\n\n\n\n<p><strong>4\/ Steel Stocks Look Strong<\/strong><\/p>\n\n\n\n<p><em>Investopedia is partnering with All Star Charts on this newsletter, which both sells its research to investors, and may trade or hold positions in securities mentioned herein. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-tech-revisits-the-scene-of-the-crime\">1\/ <strong>Tech Revisits the Scene of the Crime<\/strong><\/h2>\n\n\n\n<p>Although technology (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=xlk&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">XLK<\/a>) has been the best-performing sector this year, the relative trends suggest a potential pause in recent leadership.<\/p>\n\n\n\n<p>As you can see, XLK is pressing against a critical&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/resistance.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">resistance level<\/a>&nbsp;relative to the Russell 3000 (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=iwv&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">IWV<\/a>):<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/1-17-1100x541.png\" alt=\"\" class=\"wp-image-194035 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>This zone represents the&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/d\/dotcom-bubble.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">dotcom bubble<\/a>&nbsp;highs from 2000, making it a logical place for XLK to halt its recent outperformance.<br><br>It doesn\u2019t mean it will, of course.<\/p>\n\n\n\n<p>If the XLK\/IWV ratio breaks through this overhead supply, we could see further outperformance from tech and&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/g\/growthstock.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">growth stocks<\/a>&nbsp;over the intermediate and long term.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-rotation-hits-commodities\">2\/ <strong>Rotation Hits Commodities<\/strong><\/h2>\n\n\n\n<p>Rotation is underway among&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/commodity.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">commodities<\/a>.<\/p>\n\n\n\n<p><br>Our equal-weight energy commodity index has gained almost 20% since May 4 (when the 10-year yield posted a key&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/p\/pivotpoint.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">pivot low<\/a>&nbsp;and gold futures peaked). That\u2019s more than twice the upside of other commodity groups.<\/p>\n\n\n\n<p>The other major&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/p\/procyclical.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">procyclical<\/a>&nbsp;commodity group, base and industrial metals, has also begun to rise, gaining roughly 5% over the same period.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/2-18-1100x561.png\" alt=\"\" class=\"wp-image-194036 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/561;\" \/><\/figure>\n\n\n\n<p>Right now, the relative strength of energy contracts also jibes with the action in the U.S. stock market, with technology names pausing at logical resistance levels as&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/industrial-goods-sector.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">industrial stocks<\/a>&nbsp;break out of bullish consolidations.<\/p>\n\n\n\n<p>A healthy rotation is evident in stocks and commodities as buyers seek out new investment opportunities.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-oil-services-remain-resilient\">3\/ <strong>Oil Services Remain Resilient<\/strong><\/h2>\n\n\n\n<p>Speaking of energy, one particular industry group that catches our attention is oil services.<\/p>\n\n\n\n<p>Check out the overlay chart between the Oil Services ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=oih&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">OIH<\/a>) and&nbsp;<a href=\"https:\/\/www.investopedia.com\/articles\/active-trading\/040615\/introduction-trading-oil-futures.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">crude oil futures<\/a>&nbsp;displayed back to 2005:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/3-20-1100x541.png\" alt=\"\" class=\"wp-image-194037 lazyload\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1100px; aspect-ratio: 1100\/541;\" \/><\/figure>\n\n\n\n<p>As you can see, despite having a positive historical correlation, crude oil has been hanging near&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/s\/support.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">support<\/a>&nbsp;while OIH is pushing against new 52-week highs.<\/p>\n\n\n\n<p>Oil services stocks don\u2019t seem to mind crude oil\u2019s lack of participation. And that\u2019s important information!<\/p>\n\n\n\n<p>Under this scenario, investors might want to want to look at individual names within this subgroup for the best asymmetrical&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/r\/riskrewardratio.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">risk-to-reward setups<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-steel-stocks-look-strong\">4\/ <strong>Steel Stocks Look Strong<\/strong><\/h2>\n\n\n\n<p>How bad can the market environment be if&nbsp;<a href=\"https:\/\/www.investopedia.com\/nerves-of-steel-needed-to-trade-steel-stocks-4690038?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">steel stocks<\/a>&nbsp;are catching a bid?<\/p>\n\n\n\n<p>Here\u2019s the Steel ETF (<a href=\"https:\/\/www.investopedia.com\/markets\/quote?tvwidgetsymbol=slx&amp;hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">SLX<\/a>) breaking out of an&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/i\/inverseheadandshoulders.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">inverted head and shoulders<\/a>&nbsp;pattern:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2023\/07\/4-21-1100x561.png\" alt=\"\" class=\"wp-image-194038 lazyload\" width=\"840\" height=\"428\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 840px; aspect-ratio: 840\/428;\" \/><\/figure>\n\n\n\n<p>These patterns are popping up all over our metals and mining charts and even industrial stocks.<\/p>\n\n\n\n<p>The&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/b\/breakout.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">breakout<\/a>&nbsp;in SLX marks another data point for stock market bulls and highlights the versatile nature of this classical charting pattern.<\/p>\n\n\n\n<p>Investors often pigeonhole inverted head and shoulders as reversal formations. But in fact, they can also act as&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/c\/continuationpattern.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">continuation patterns<\/a>.<\/p>\n\n\n\n<p>One thing is clear: The uptrend continues for steel stocks and many other cyclical&nbsp;<a href=\"https:\/\/www.investopedia.com\/terms\/v\/valueinvesting.asp?hid=aa5e4598e1d4db2992003957762d3fdd7abefec8&amp;did=9796195-20230726&amp;utm_campaign=chart-advisor_newsletter&amp;utm_source=investopedia&amp;utm_medium=email&amp;utm_content=072623\" target=\"_blank\" rel=\"noreferrer noopener\">value<\/a>-oriented market areas.<\/p>\n\n\n\n<p>That\u2019s more good news for investors.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally posted 26th July 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although technology (XLK) has been the best-performing sector this year, the relative trends suggest a potential pause in recent leadership.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,14,17,18,6,8,9,22,23,26,3],"tags":[6687,3867,11785,1302],"contributors-categories":[13686],"class_list":{"0":"post-194034","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-commodities","7":"category-etfs","8":"category-futures","9":"category-macro","10":"category-north-america","11":"category-region","12":"category-securities","13":"category-stocks","14":"category-technical-analysis","15":"category-text-articles","16":"category-traders-insight","17":"tag-iwv","18":"tag-oih","19":"tag-slx","20":"tag-xlk","21":"contributors-categories-investopedia"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Chart Advisor: Tech Revisits the Scene of the Crime<\/title>\n<meta name=\"description\" content=\"Although technology (XLK) has been the best-performing sector this year, the relative trends suggest a potential pause in recent leadership.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/194034\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Advisor: Tech Revisits the Scene of the Crime | IBKR Campus US\" \/>\n<meta property=\"og:description\" content=\"Although technology (XLK) has been the best-performing sector this year, the relative trends suggest a potential pause in recent leadership.\" \/>\n<meta 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