Don’t look now, but tech could be in real trouble. Wolfe Research technical strategist Rob Ginsberg pointed out that the Technology Select Sector SPDR fund (XLK) in June hit its highest level relative to the S & P 500 since March 2000, when the dot com bubble and first wave internet stocks peaked. Since then, the XLK is down 6% relative to the broad market index. “The level it peaked at almost exactly coincides with where the Tech ETF peaked on a relative basis in 2000. Not exactly what you want to see if you’re an investor putting new money to work within Tech,” he wrote. Ginsberg also noted that chipmakers are showing signs of rolling over, specifically when looking at the VanEck Semiconductor ETF (SMH) . “The group continues to trade heavy and NVDA’s choppy week did not help,” he said. The SMH closed Friday at $252.96, and the strategist expects the $233 level to be tested near term. That points to a 7.9% decline. Ginsberg’s comments come after the Nasdaq Composite hit a fresh intraday record on Friday, joining the S & P 500 and Dow Jones Industrial Average at all-time highs. Roth MKM also pointed to another possible technical headwind. Chief market technician JC O’Hara noted that the Invesco QQQ Trust — which tracks the Nasdaq-100 index — still remains below its June high, meaning it’s still “under stiff resistance in front of this week’s massive earnings parade of key and influential index members,” such as Microsoft, Apple and Amazon. “We still exercise some degree of caution when we view Technology stocks, as short term trends and near-term momentum appear to be stalling,” O’Hara wrote. Elsewhere on Wall Street this morning, Wells Fargo named Spotify a top pick and raised its price target to $470 from $420, implying upside of more than 20%. “Incremental Premium gross margins imply that Spotify’s evolving product mix and Label relationships are improving the bottom-line,” the bank wrote in a note. “SPOT is also efficiency-focused on overhead costs. These are all the components of a premium growth stock.”
Read More: Tech stocks could be in for a reckoning, this chart shows