Tech Stocks, Leading Market Bounce, Just Made Up Half Their LossBy
S&P 500 tech index beats other industries in past four days
FANG block of mega-caps doing better with 61.8% retracement
It’s too early to sound the all clear after the worst equity selloff in two years. But if you take a look at tech stocks, things are heading in the right direction.
Not only is the biggest industry in the U.S. market is leading the four-day bounce from the bottom. The S&P 500 Information Technology index also just passed 1,131, marking a 50 percent retracement of the slump from Jan. 26 to Feb. 8, using intraday extremes. That’s bullish for chart watchers.
The chart pattern looks more positive for tech mega-caps. The FANG block of Facebook, Amazon, Netflix and Google’s parent Alphabet has clawed back 61.8 percent of its decline, a level of significance under the Fibonacci number sequence described by Leonardo of Pisa in “Liber Abaci” in 1202.
The resurgence in tech shares came after the group gave up their leadership to defensive industries such as utilities during the two-week selloff.