(Premium) November Information Technology Outlook

Information Technology broke down relative to the S&P 500 as we expected, but the weakness didn’t accelerate. The sector is still battling with resistance from two decades ago, and, barring a short-term trade, there’s really no reason to be overweight the group until we’re above those 2000 highs. The question is, should we be neutral or underweight? Based on what we’re seeing in other growth areas of the index, we still think the higher probability is further declines for this ratio. We’ll have more conviction if we see those April 2021 lows broken.

There just aren’t many things to be excited about in the tech space. We aren’t seeing a bunch of major breakdowns, but semiconductors continue to weigh. They did manage to find support at the pre-COVID highs, but we need to see a lot more before calling an end to this downtrend.

To end on a more positive note, here’s a constructive inverse head and shoulders reversal pattern shaping up for Gartner.

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