Technology overtook Consumer Cyclical and rose to 5th within the DALI Sector Rankings.
Monday’s push higher within US Equities brought notable increases for participation indicators and changes for DALI. The bullish percent for the S&P 500 (^BPSPX) rose above the 70% level and the positive trend indicator for SPX (^PTSPX) witnessed its sixth largest one-day increase, moving up 8% to 58%. Indicating that roughly 6 out of every 10 stocks within SPX maintain a buy signal and a positive trend on their point and figure charts.
Within NDW’s DALI Rankings, the positive day for equities drove Domestic Equities back above Commodities to the top position within DALI (discussed more in the feature below). On the sector level of DALI, Technology overtook Consumer Cyclical and rose to 5th after a brief period in the lower half of the rankings. Within the past two weeks, Technology has garnered over 30+ tally (or buy) signals with most of those coming from Consumer Non-Cyclical and Energy. The abrupt rise for Technology from a relative strength standpoint has been primarily driven by improvement within Semiconductors, but leadership within the sector continues to reside within the Internet and Software industries (among the NDW 40 Industry groups).
The rally within Technology has pushed short-term indicators like the 10-week (measuring the percent of stocks trading above 50-day MA) and weekly momentum (measuring the percent of stocks with positive weekly momentum) to or near highs. The 10-week for Technology stocks (^TWECTECH) increased more than 13% after Monday’s trading to 72% and marked the second largest one-day increase in the indicator’s history (largest one-day increase was 11/10/2022) beginning in September 2014. This suggests that more than 7 out of 10 stocks within the Technology sector trading above their 50-day moving average. Meanwhile, the percent positive for weekly momentum indicator for Technology (^MOECTECH) moved to 92% following Monday’s action to mark its highest chart level in five years.
Bearing in mind the high levels of short-term technology indicators the graph below breaks down the current length of time that stocks within the sector have maintained positive weekly momentum. Historically momentums have remained positive (or negative) for roughly 6 to 8 weeks on average. As of Monday’s close, more than 70% of the stocks within technology have maintained positive weekly momentum for a month or less, indicating some stocks still may have potential for upside. On the flip side, over 15% of the stocks within the sector have maintained positive weekly momentum for six weeks or more. Short to intermediate-term positions that maintain weekly momentum for six weeks or more could be positions that have rallied to extended points on their charts, providing a potential opportunity to lock in a profit or mitigate losses depending on the cost basis.
