Of the 175 key ETFs that we track, just one made a new all-time high on Tuesday – the iShares Expanded Tech-Software Sector ETF (IGV) . This is significant for a few reasons. First, it shows that technology has continued to bounce back. This is crucial given that the tech unravel was one of the underlying reasons that the S & P 500 took sizable hits both in early August and early September. The sector will be a critical factor in whether the broader market can take advantage of the historically strong final two months of the year, as well. IGV, thus, was the first major technology ETF to hit new highs after a very turbulent past few months. This is especially noteworthy given just how long it has taken IGV to even get to this point. Before Tuesday, IGV’s last all-time high happened way back in November 21 (nearly three years ago), when the ETF hit an intra-day high of $89.76. From that day, it cratered 47% to its low in November 2022. For some context, while the SPDR Technology ETF (XLK) hit a low on the same day in November 202222, its snapback unfolded much more quickly. XLK hit a new all-time high way back in July 2023 and has kept going. Thus, since that high, IGV is just up 4% vs. an XLK up 37%. Both ETFs have done very well in the last 24 months though: IGV is up 97% since the 2022 low, while XLK is up 103% over the same time frame. Buying anything after a near 100% move may not sound overly enticing. And while we can’t ignore that kind of gain, IGV’s chart is what matters most to us. And last session, it not only hit a new all-time high, but it did so by breaking out from a 10-month bullish pattern. The measured move produces an upside target near $102. As just discussed, while IGV has lagged XLK (and other popular indices and ETFs) in making highs over the last 18 months, it’s proven it can take advantage of big, multi-month bullish formations. It will be trying to do so again now. Also, notice how IGV’s 14-week RSI has continued to oscillate between overbought territory (70 and above) and the mid-point (near 50). That shows momentum has been confirming the upswing, which is like what happened from 2020 through 2021. As long as that remains the case, IGV will continue to be in healthy technical shape. If/when that stops, it would connote a potential character change, which is exactly what happened in late 2021. Multi-year Breakout Zooming out, we see just how significant the breakout to new all-time highs actually is: IGV also is punching through a three-year bullish cup and handle pattern. In fact, all of the back-and-forth movement in 2024 has effectively produced the “handle” portion of the formation. Looking at the major pattern breakouts going back to 2010, two major things stand out. First, prior breakouts all led to immediate and long-lasting upside follow through. And second, the current pattern is by far the biggest one we’ve seen yet. While that doesn’t guarantee a thing for the future, IGV breaking out of two patterns simultaneously and finally clearing a previously challenging resistance zone has been an undeniably bullish development. Next step: maintain the breakout through earnings season. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
