Is Big Tech Ready To Break Out?

Some Key Charts To Watch

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In this weeks letter I think it’s starting to make sense to dig a little deeper into Tech, and specifically mega cap Tech and go over some of the heavy hitter names that everyone knows.

But let me begin by saying my work has been bullish areas of technology for a while.

If you’ve picked up our letters this year, you’ll already know stocks like NVDA, META, AMD and TSLA have been big performers for us this year.

Many of the best technical charts just now fall into these ”buy low / sell high” category of charts.

I’ll add 1 or 2 examples below but rather than dine out on past calls, I prefer to look forward and listen to what the market is saying today.

So lets dig into it, and lets start with the Q’s.

Invesco QQQ Trust

The Q’s have been choppy at best over the last year with the market favouring industrials / materials etc, and the big question I have going into March month end is what’s going to happen if the technical setups in Tech resolve higher?

The bigger the base the higher in space is how I learned it and if we compare the Q’s against the S&P500 it gives us a little more insight.

If this ratio resolves higher and gets back ABOVE those 2000 Highs, we could potentially see out performance from mega cap tech again.

To get a handle on whether it WILL break out, I like to put in the hard yards around here so lets dig into the biggest individual components.

Apple Inc (AAPL)

Alphabet Inc (GOOG)

(Buy Low / Sell High Example)

Meta Platforms (META)

(Buy Low / Sell High Example)

Amazon (AMZN)

As we can see, a lot of the big hitters are shaping up nicely, the only question mark I have (I think we all have it) is whether or not the market could fall off a cliff in the next 5mins?

If there’s 1 tip I could give everyone in the current environment is to turn off the news and the mainstream media shit show.

They’re most definitely NOT your friends, they don’t have your best interests and they’re paid by advertisers / investment banks to get your clicks.

Systematic process will always beat emotional decisions based on headlines.

Financials (XLF)

Just look at The Economist who could be nailing it yet again with the best contrarian signal there is with the banks.

Like I say, they’re not your friends.

Financials below $30 is a massive problem for the market.

Relative Strength

A funny thing happened this week, some of you will have picked up a tweet I put out a couple of days ago.

I fielded a few questions on it from fellow professionals because it goes against a lot of the thinking within the Technical community.

To clarify, I also like to use relative strength, but (for me) there has to be a trending market to have any real high conviction.

If it’s a choppy market, I find a lot more value from the buy low / sell high school of technical analysis / investing and looking for the humble “failed move” which is essentially a failed break out/down. (KWEB / IWM / SPX) have all been recent failed move calls)

Here’s a recent example of our premium work.

Lithium (LIT)

Look at Lithium (buy low / sell high example)

Judge each chart on its individual merits is how I learned it and when you dig into the Lithium chart, it tends to outperform the market when it rebounds and we’re seeing the expected big move in SQM (our pick from the ETF holdings) which is +15% in a matter of days.

In Conclusion

The chop is likely to continue for the time being, on 1 hand we have tech threatening to break out, and on the other hand, we have Financials which absolutely could crater the market, so I remain open minded and open to all possibilities.

Tech hasn’t yet broken out and financials haven’t yet broken down, so the charts above have still to CONFIRM the moves… I don’t make predictions on whether they will or whether they won’t, I leave those predictions for the wall street clown shows.

I prefer to let price confirm the moves.

Batting singles in the current environment is perfectly acceptable.

In the meantime, I’ll continue to identify the best charts weekly.

Have a great weekend.

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