Bearish Formations In The Tech Sector
The technology sector continued to drag the market lower on Monday, 10 May’21. From the technical perspective, the tech sector ETF (XLK) has potentially formed another Bull Trap pattern over the last several weeks, which is eerily similar to the one formed in February 2020.
On top of that, AAPL has potentially formed a bearish Head and Shoulders pattern.
Bearish Divergences In The Tech Sector
Most of the Nasdaq’s breadth indicators have formed bearish divergences with the underlying index. What is curious is that this is the ‘second’ significant bearish divergence since the March 2020 lows. The prior divergence from June’20-September’20 led to a -12% correction but eventually the prices rebounded and Nasdaq made several new all time highs in 2021.
BPCOMPQ and NDX, daily
NASI and NDX, daily