Big-cap tech stocks continue to dominate the market, with the NASDAQ 100 showing strong performance, according to Cycles Research screens. Despite some corrections, tech stocks have remained in a leadership role since last autumn. Key observations from the charts include the confirmation of actual price highs through relative strength reaching new highs, higher lows in weekly momentum, and a rising monthly price cycle throughout the year. However, a summer correction is expected from August 29th to October 2nd.
One of the standout performers in the tech sector is Apple, which has recently gained technical strength. The charts show that Apple has hit a new high on a weekly basis, with the monthly cycle dipping into early July but then rising to yearend. Additionally, Apple is entering its strong seasonal period from July 2 to September 2, during which shares have historically risen 70% of the time. This reinforces the bullish action of the monthly cycle, which is pointing upwards from early July. Furthermore, most funds are underweight Apple, indicating there is buying power on the sidelines.
The NASDAQ Monthly Histogram provides a visual representation of the odds of higher prices in a month, with red bars showing the likelihood of increased prices. The blue bar indicates the percent price change, while the green bar represents the expected return. The NASDAQ Monthly Cycle chart illustrates the overall trend of the market, showing an upward trajectory throughout the year. This data suggests continued potential for growth in the tech sector and specifically in big-cap stocks like Apple.
With the NASDAQ 100 maintaining its leadership role and Apple showing promising technical strength, the outlook for the tech sector remains positive. Despite the looming summer correction, the charts indicate strong momentum in the market. The combination of bullish monthly cycles, strong seasonal patterns, and buying power on the sidelines suggests that there is room for further growth in big-cap tech stocks. Investors may want to consider increasing their exposure to Apple and other tech stocks to capitalize on this potential for continued growth.
Overall, the data from Cycles Research screens paints a bullish picture for the tech sector, particularly for big-cap stocks like Apple. The charts reveal strong technical strength in Apple, with the potential for continued growth throughout the year. The expected summer correction may present a buying opportunity for investors looking to enter the market or increase their exposure to tech stocks. With the combination of strong momentum, bullish cycles, and buying power on the sidelines, the outlook for the tech sector remains positive, offering potential opportunities for investors in the coming months.
