Tech Sector’s Wild Ride: From Promise to Devastation
Just a month ago, on October 9, the Information Technology sector was showing signs of life after a three-month slumber. A few semiconductor giants, namely NVDA and AVGO, were leading the charge, forming bullish patterns that hinted at all-time highs. NVDA’s continuous inverse head-and-shoulders pattern and AVGO’s complex double bottom since June were both nearing completion, sparking optimism among investors.
A Cautionary Note
However, we sounded a warning bell, noting that the majority of stocks in the sector were not participating in the rally. We cautioned that the strongest industry moves occur when most stocks are on the same page, and that was not the case at the time. Little did we know how prophetic those words would prove to be.
The Selloff That Shook the Sector
Fast forward to October 15, and the semiconductor sector was ravaged. ASML, a leader in the space, plummeted a staggering 16% after issuing disappointing 2025 guidance. The company’s worst day since the pandemic, and prior to that, the IT wreck of 2002, left investors reeling. KLAC, LRCX, and AMAT were not spared, with each stock tumbling 15%, 11%, and 11%, respectively. The massive volume on that day felt like a capitulatory selloff, but it came without the usual precursor of an extended selloff.
A New Reality for Tech Investors
The events of October 15 served as a harsh reminder that even the strongest sectors can experience sudden and drastic reversals. As investors, it’s essential to stay vigilant and adapt to changing market conditions. The tech sector’s wild ride is far from over, and only time will tell what the future holds.
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