Katie Stockton cites technical breakouts in XLF, XLI, and XBI as Big Tech momentum shows signs of fatigue.
A Wall Street technician identified financials, industrials, and biotech sectors as potential market leaders, citing technical breakouts in key ETFs. The call follows signs of weakening momentum in semiconductor stocks like NVIDIA and Broadcom, which have driven recent market gains.
The Financial Select Sector SPDR Fund (XLF) broke above its 200-day moving average, a signal Stockton described as bullish for intermediate-term prospects. The Industrial Select Sector SPDR Fund (XLI) is up 17% year-to-date, while the SPDR S&P Biotech ETF (XBI) has surged 71% over the past year, reflecting a rotation away from Big Tech.
Stockton emphasized these setups are trade-driven rather than fundamental, urging caution as breakouts require confirmation. Markets are searching for new leadership as the Big Tech rally shows cracks, with financials and industrials poised to benefit.