According to Bank of America, the US tech sector is now worth more than the entire European stock market.
Although, in the wake of the recent setback in the tech sector, the main concern seems to be massive overvaluation as a reason for the latest selloff.
We, however, see arguments against a pessimistic view. Many tech stocks are seen as profiteers of the virus crisis due to the increasing pressure to digitize. Stocks like Apple or Amazon are already showing greater resistance to the fear of the second pandemic wave and new lockdown measures.
Apple, for example, had rallied the previous evening after an early approach to the 100-dollar mark and went out of trading three percent higher.
Since the recent high, the market has reached the yellow target box for the current pullback. Even though the ideal target was breached to the downside by $2, we expect the bulls to step back in very soon, taking Appel to new all-time highs.
Under $128.78, the alternative scenario should still be taken into consideration. We give this scenario a 30% probability, which would pave the way towards $95, bevor the current decline is completed.
To summarize, both scenarios are pointing to new all-time highs in the medium-term perspective.
What's your opinion on the tech sector?
