Should you pounce on tech stocks?

The stock market is currently in some uncertain times, and that makes it harder to decipher the health of the individual sectors.

But when I don’t feel confident in some of my traditional indicators to tell me how strong the tech stocks are, I always have a go-to tool that I use to get a snapshot of the tech sector as a whole.

And it has told me everything I need to know…

Of course, we can’t rely on just one indicator to give us our entire outlook on a market sector, but my tool always gives me the ‘pulse’ of the technology market.

That’s because I use the exchange traded fund, or ETF, for the technology sector—the Technology Select Sector SPDR (XLK).

ETFs serve as representatives of sectors, commodities, market indexes like the S&P 500, etc.

And these ETFs are even tradable securities, just like individual stocks.

But my main use for the XLK is to give me some insight into the technology sector when I can’t count on some of my traditional indicators.

Let’s take a look at the XLK thanks to Stockcharts.com:

Again, while this ETF can’t tell me absolutely everything about the tech sector, it gives me some great insight into the overall health of tech stocks.

And what we can see from this chart is that tech stocks are relatively healthy.

That curvy blue line is the average price for XLK over the past 50 days, and right now the price of XLK has managed to resurface above that blue line, which is a good sign.

Obviously the recent stalling of the overall market has caused some plateauing for the technology sector as well, but considering the lack of strength in other markets, the XLK gives me a positive attitude toward tech stocks.

Now I’m going to go find some of the very best tech stocks to trade. If you want to know what they are, join my Tech Stock Jackpot service.