The technology sector’s recent bull run is lifting Nasdaq-related exchange traded funds to new highs and some traders believe that trend can continue such as the Technology Select Sector SPDR (NYSEArca: XLK) and broad market ETFs like the PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100 Index, have recently been in rally mode and some market observers do not see the party ending in the near-term.
Recent ebullience towards tech ETFs is represents a rapid reversal of fortune. Just a few weeks ago, investors were worried about the impact Brexit could have on technology, the S&P 500’s largest sector allocation.Speculation that Great Britain’s decision to depart the European Union could weigh on technology stocks comes just a few weeks after chip stocks and ETFs started showing signs of leadership.
QQQ, one of the largest U.S. ETFs, has equal-weight equivalents equal-weight equivalents such as the Direxion NASDAQ-100 Equal Weighted Index Shares (NYSEArca: QQQE) and the First Trust NASDAQ-100 Equal Weighted Index Fund (NasdaqGS: QQEW).
Reports CNBC: “We’ve now got the Dow, we’ve got the S&P and now we’ve got the Nasdaq making all-time new highs,” Piper Jaffray technical analyst Craig Johnson said Tuesday on CNBC’s “Power Lunch,” referring to each major index hitting new all-time highs in recent weeks.”[related_stories]
Of course, QQQ will need help from Apple, Microsoft and the so-called FANG stocks – Facebook (NasdaqGS: FB), Amazon (NasdaqGS: AMZN), Netflix (NasdaqGS: NFLX) and Google (GOOGL) to bounce back because the traditional Nasdaq-100 is heavily allocated to those names.
However, old guard tech names that pay dividends such as Microsoft (NasdaqGS: MSFT) and Cisco Systems (NasdaqGS: CSCO) are helping drive the sector higher this year.