When looking to make a trade in the stock market, there is no single indicator that can give you all of the information you need. There are many aspects of a trade to look at, but some are more important than others.
One of the stronger indicators for any trade is the strength of the sector. Stocks in a strong sector have a great chance of performing well, while the opposite is true for stocks in a weak sector.
So how does the technology sector stack up against the rest of the market right now?
The technology sector includes some of the most potent stocks in the market, and that makes the sector’s strength somewhat volatile relative to the others…
That’s why I always keep an eye on the tech sector—so I know when tech stocks are hot, and when they are dangerous.
And when look at the strength of a sector, I check for several bits of information that never change, including how many stocks are advancing in the group, how the sector has performed over several time periods, etc.
The first thing that immediately drew my attention when I began looking up the data on the technology sector was the high percentage of stocks advancing within the group—39%.
That’s the second-highest amount for any group!
And while technology couldn’t crack the top 3 groups in terms of strength over the past 6 months, it is actually has had the strongest performance in the market over the past 1 and 3 months.
We have seen plenty of movement in technology recently, and thanks to a number of factors, that movement has consistently been up.
And that upward movement doesn’t appear to be stopping at the moment. Technology is also one of the top sectors in terms of stocks hitting new price highs in the past several days!
With over 400 stocks in the group, technology has solidified itself as one of, if not THE, top sector in the entire market.
At least for now, I know that this is where my focus will be…
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