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Tempted to Buy the Dip in Tech Stocks? History Suggests Patience

  • Volume spike over last two days signaled selling exhaustion
  • Yet bottom usually takes weeks to build after sentiment shock
Bloomberg business news

FAANG Stocks Hit Hard in Tech Selloff

With tech shares showing signs of stabilization after a two-day rout, investors may be tempted to jump back into the hottest trade of 2017.

History shows they’re probably better off resisting. The reason, according to Sundial Capital Research, is the tidal wave of trading that accompanied Friday and Monday’s rout. A similar torrent has occurred only four times since 1999, and three resulted in tech shares needing weeks to bottom, the firm said.