XLK Relative Strength – Leaders Extended, Rotation Risk Building

XLK has been one of, if not the strongest sectors on a relative basis since bottoming at the end of March. Despite its relative strength, top SXLK holdings are into areas where profit-taking looks to be occurring, and a rotation out may be taking place (see Weekly Supply zone on RS chart 0.4157-0.4199).

This comes as NVDA, MSFT, AVGO, and INTU are into -0.236 fib. extensions. ORCL and PLTR show a similar picture, with ORCL reaching the 1.618 extension, while PLTR failed to reach its 1.618 extension at $162.05.

Weak:
$APPL, CRM, IBM, and NOW are among the weakest performers. If $APPL doesn’t hold around $200.00, look for it to slump to the $170.00 area.

Trades:
Look for AMAT to hold around $169.46 for a move to $205.06 (Weekly Supply) or $243.40 (Monthly supply). If AMAT fails to hold the $169.46 print, expect a move to $156.75.
Look for QCOM to hold $145.20 (Weekly) for a move to the $172.23 area (Weekly Supply).
Look for ADBE to hold $329.30 for a move to $449.40 (could top out around $417.30 depending on buying volume).
Look for ACN to hold $250.00 (Weekly), or I like it better a $218.32 (Monthly Demand).

Featured Chart:
Look for APH to hold $100.71 (Daily close on 07/23) for a move up to $116.00-$116.50 area. If APH fails to hold around the $100.00 mark, I’d expect a move below $95.00.

XLK move down to $240.38?

Let me know your thoughts for or against any of these names in the comments.

https://www.tradingview.com/x/JLTI4lNW/AMEX: