Will Tech Stocks Underperform In 2022? Watch This Ratio

www.investing.com/analysis/will-tech-stocks-underperform-in-2022-watch-this-ratio-200613774

By Chris Kimble | Jan 05, 2022 04:11PM ET

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Tech stocks began underperforming the broader market several months ago when the NASDAQ Composite to S&P 500 Index ratio peaked out at 2000 high.

This is worth noting because this tech ratio has been in a rising up-trend for the past two decades, highlighted by each (1) on today’s “monthly” chart.

NASDAQ/S&P 500 Ratio Monthly Chart.

While this suggests long-term strength, it doesn’t mean that strong pockets of under-performance (corrections) cannot emerge. This is exactly what we saw over the past year or so.

That said, tech stocks perked up into year-end, with the ratio kissing the underside of potential resistance to close out December at (2).

If the ratio turns lower at (2), it suggests that tech stock may underperform for several more months.

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Eliott Morst Jan 05, 2022 5:49PM ET

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Will Tech Stocks Underperform In 2022? Watch This Ratio

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