XLK ETF: Jump Into the Computer Tech Sector Today
I could tell my son was gifted at an early age.
He can shoot a basketball with his eyes closed. He picked up ice hockey in less than a year. And he can hit a fastball, throw a football and make a diving catch.
To most, these things may not sound impressive. But what shows me how gifted he is, is that he does all these activities effortlessly.
Other kids trip over their own feet or can’t pick up a football to throw a tight spiral.
Those skills come naturally to some kids.
And when it comes to investing, those are the types of strategies you want — the ones that come naturally.
I don’t let the market’s volatility influence my investing. I let my strategies mold my perception of the market instead.
And one of the strategies that I’ve found works best is seasonal trends.
Each year they pick up on huge winning trades for me.
And right now, a seasonal trend is just starting in a sector you need to jump into — technology stocks.
Let me explain…
Computer Tech Stocks’ Seasonality Rise
To learn more about how you can profit from the slow months ahead, watch my video below.
Jumping into computer technology stocks today may be nerve-racking.
The sector has dropped nearly 10% in May alone, and the market declined over the same time frame.
Based on its seasonal trend, I know it tends to rise from mid-June through February. Regardless of the market’s conditions, trusting these seasonal trends pays off big time.
Take the volatile month of May for example.
At the start of the month, I told you about a new way to approach this historically weak six-month period — famously known as “sell in May and go away.”
The period from May through October has wreaked havoc throughout stock market history.
And so far, this year has followed that volatile pattern.
My Subscribers Made 30% and 50% Gains in May
April 30 marked the high point of the year for stocks. Since then, the S&P 500 Index has dropped more than 5%.
But I gave you a different, more actionable approach for the weakest six months of the year — “Come May, diversify away.”
It’s a simple concept. You need to maintain your exposure to the markets as we head into this volatile period. And you can do this using a mix of bearish and bullish stock positions.
My action to take for you was to add exposure to the consumer staples sector. That would have been a solid place to be in the recent sell-off.
While the S&P 500 dropped over 5%, consumer staples stocks fell just 1%.
In my seasonal service Automatic Profits Alert, we held individual stocks. Two of them netted us gains of 30% and 50% in May. We also added a bearish trade that handed us a swift double-digit gain from the pullback.
We grabbed profits from stocks that continued to climb throughout this volatility. And we benefited from the pullback with bearish trades.
Today, stocks are set to experience a rebound. That’s why I’m sticking to my seasonal system.
A Prime Season for Computer Tech Stocks
The computer technology sector is entering its prime season to rally this month. And after the latest pullback, now’s the perfect time to jump in.
I’ve run my seasonal analysis on the sector over the last 10 years. It highlights a clear seasonal trend from mid-June through February that we can capitalize on each year.
Last year, we traded this seasonal trend with Symantec for a 15% gain. This year, we’ll be looking for another solid double-digit gain. There is a stock that has the potential to top 30% or more in gains based on the current market environment.
If you want to know more about the stock I’ll be trading, you can learn all about it — and how to join me — in my seasonal service Automatic Profits Alert.
In the meantime, use the recent pullback in the tech sector to add exposure to these tech stocks.
A great way to do so is with the Technology Select Sector SPDR exchange-traded fund (NYSE: XLK). The ETF tracks tech stocks like Apple, Microsoft, Intel and many others. It will give you a clear gauge on the tech sector.
This is the sector that I base my seasonal trends on, and it is set to rally in the coming months. Now’s the time to buy this ETF.
Chad Shoop, CMT
Editor, Automatic Profits Alert