The selloff that has erased $250 billion from the value of technology shares is threatening to end the industry’s longest stretch of uptrend in more than two decades.
Down
3.5 percent since, the decline put the index on the edge of breaking its 50-day moving average. It’s stayed above the threshold for 131 consecutive days, the longest stretch since 1995.
The last two times when prolonged stretches of above the 50-day average ended, tech shares did poorly in the next few months.
* In September 1995, when a 166-day run of above that technical level came to a stop, the Nasdaq 100 was flat in the ensuing one and three months. That compared with average gains of 1.3 percent and 3.9 percent, respectively, for any such period.
* The index dropped 13 percent in one month and 16 percent three month later when an eight-month stretch of bullish trends ended in July 1986.
Source: Bloomberg Pro Terminal
Junior Trader Stefan Panteleev
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