The tech sector experienced some volatility in December, partly physiological if we think of the run made by the index this year (Nasdq 100: + 26%), partly linked to the worst of the pandemic and above all to fears of rate hike pending the week of Central Banks (15 and 16 December key days). Indeed, both the Fed, the BOE and the ECB have seen (to varying orders of magnitude) a tightening of monetary policies. Above all, the Fed has decided to double the speed of tapering, while the Dot Plots reveal the intentions of the FOMC members to make three hikes in 2022 and three in 2023. Despite this, long-term rates, those that have the greatest influence on equity since included in the estimation models, they have not moved much and this is in our opinion because the market is betting on a global economic slowdown in 2022. If this were the case, the central banks will be forced to stop the more hawkish policies to return to support economies and markets with more accommodative policies. An element that would give a boost to equity and above all to tech. We are therefore positive on Tech, even if in the short and medium term there could be further volatility linked to the choices and declarations of central bankers, in the wake of still strong inflation data.
There are certainly several ways to invest in US tech. In this section we offer you a graphical analysis of the Invesco QQQ Trust fund and, as a tool to ride the megatrend, the Leverage Share ETPs with which it is possible to leverage both long and short. From a technical point of view, the basic setting remains absolutely bullish, despite the possibility of further reversal phases in the short and medium term, which we still see as a buy opportunity.
We recommend going LONG on US technology by buying the Leverage Shares Tech 100 5X ETP (ISIN: XS2399364152) with an increase in exposure in the event of downturns towards 380 point, for a short term target towards 408 points. Alert/stop loss should be below 370 points (daily close).
