Monday, November 21, 2016 11:29:52 AM
BY ART HILL XLK
Despite relative weakness the last few weeks, XLK remains in a clear uptrend and shows no signs of weakness on the price chart. First, note that XLK recorded 52-week highs throughout 2016 and is currently less than 2% from a new high. Second, XLK held the September low when the market swooned and SPY broke its September low. Third, XLK is showing signs of life with a surge off the support zone at 46.
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The lower window shows the price relative, which is the XLK:SPY ratio. Overall, XLK outperformed SPY for over three years because this ratio rose. The blue rectangle shows a long period of flat relative performance because the ratio moved sideways. The red areas show short and sharp pullbacks in April 2016 and October 2016. I would not read to much into the most recent pullback because the overall trend is clear up and this is the dominant force at work.
Despite relative weakness the last few weeks, XLK remains in a clear uptrend and shows no signs of weakness on the price chart. First, note that XLK recorded 52-week highs throughout 2016 and is currently less than 2% from a new high. Second, XLK held the September low when the market swooned and SPY broke its September low. Third, XLK is showing signs of life with a surge off the support zone at 46.
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The lower window shows the price relative, which is the XLK:SPY ratio. Overall, XLK outperformed SPY for over three years because this ratio rose. The blue rectangle shows a long period of flat relative performance because the ratio moved sideways. The red areas show short and sharp pullbacks in April 2016 and October 2016. I would not read to much into the most recent pullback because the overall trend is clear up and this is the dominant force at work.
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