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An Amazing Long Term Technology Stock Chart. How Much Upside Potential Is Left?

Technology is the top performing stock market sector. Its long term chart is truly amazing. Since markets bottomed in 2009, the technology index is up 5-fold.

The technology index XLK, represented on the chart, is up 0.65 percent for the day and 13.7 percent year-to-date. It closed today at 54.74 points.

The key question is: how much upside potential is left?

Investors tend to become very enthusiastic if prices are high, says InvestingHaven’s research team, but that is mostly a sign of extreme optimism. Investors should be cautious if stocks or markets get ahead of themselves.

Right now, the technology sector is trading close to an extreme point. As seen on the long term chart, which looks amazing by the way, the technology index XLK is very close to its resistance line in its rising channel.

That mostly is a sign that not much upside potential is left, says InvestingHaven.

That view is different than what CNBC reported. Analysts forecasted an even stronger rise in technology stocks, which is not in agreement with InvestingHaven’s technology stock chart.

Does that mean that the technology sector is about to collapse? Not at all, a healthy correction is in the cards, sooner or later. Timing a correction is a fool’s game, but realistically an extreme positive price level is followed by a period of cooling off.

The technology space will remain the outperformer in the years ahead. Investors with a higher risk profile can consider these 3 small-cap technology stocks or these 3 small cap technology stocks, all with huge growth potential.

Once markets start to correct, InvestingHaven’s analysts see the technology index XLK correct to the 45 points area, which is a normal retracement by the way. Below 45 points it becomes tricky for stock bulls as that could indicate a trend reversal.

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