The Technology sector is a prime candidate to lead equities higher over the coming quarters, according to Ari Wald, Technical Analyst at Oppenheimer.
Wald points out that the S&P 500 Technology sector (XLK) has experienced a 17-year breakout in price and that the Technology sector in Europe is similarly breaking through decade-long resistance (see Chart 1). On top of this, Wald says the sector is additionally attractive because of its relative resilience to an environment of fluctuating interest rates.
Wald thinks the Tech story is global and is particularly good news for South Korea, providing good reason to be a buyer of Korean equities using the iShares South Korea (EWY) ETF, which has a 40% Tech weighting and is also experiencing a breakout from a decades’ long trading range (see Chart 2).