When stocks are trending higher, the bulls are in control. When they’re heading lower, it’s the bears who are in charge.
The breaking of a correctly drawn uptrend line shows that the bears may be taking control. It could be the start of a new downtrend.
That may be the case now with the Technology Select Sector SPDR Fund (NYSE:XLK). After trending higher since mid-June, XLK has broken its uptrend line.
If shares do head lower, there’s a good chance they find support around $143 as this level was resistance in April and June.
In financial markets, levels that have been resistance can convert into support. It could happen here.
