The technology sector performed well in 2016. The Technology Select Sector SPDR ETF (XLK) had returned 15.6% in 2016 as of December 29, 2016.
We discussed earlier that various macroeconomic factors played major roles in 2016. The technology sector moved in the same direction as the broader market, tracking the S&P 500 Index’s performance. In early 2016, XLK fell nearly 9.3%, making a low of $38.73 on February 11, 2016. After reaching this low, it recovered.
Performance of the technology sector
XLK is currently trading at par with its 20-day moving average and 2.5% above its 100-day moving average. On March 18, 2016, its 20-day moving average crossed above its 100-day moving average. It rose 11.4% from March 18, 2016, to December 29, 2016.
When short-term moving averages cross above long-term moving averages, the price trend becomes bullish, and vice versa.
In the next part of this series, we’ll analyze the 2017 outlook for the technology sector.