Technology stocks lead in bull market
Technology stocks are leading the market. Let’s study the performance of a PCI – Technology stocks index , composed of stocks of world’s biggest technology companies. Will the index rise?
On the daily chart Technology_Stocks: D1 has been rebounding after a plunge in early June. The price has remained above the 50-day moving average MA(50).
- The Bollinger bands are narrowing, indicating declining volatility.
- The Parabolic indicator has formed a buy signal.
- The MACD indicator is above the signal line and the gap is rising which is a bullish signal.
- The stochastic oscillator has breached into the overbought zone which is a bearish signal.
We believe the bullish momentum will continue after the price closes above the upper Bollinger band at 154.24. It can be used as an entry point for a pending order to buy. The stop loss can be placed below the last fractal low at 146.18. After placing the pending order, the stop loss is to be moved to the next fractal low, following Parabolic signals. By doing so, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop loss level (146.18) without reaching the order (154.24), we recommend canceling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | Above 154.24 |
| Stop loss | Below 146.18 |