Memory stocks are pressing their summer highs. Where the charts show them going
Todd Gordon looks through the charts on the DRAM ETF as well as the broader tech sector.
TL;DR
- The XLK ETF is consolidating, forming a pattern that suggests a bullish breakout rather than a top.
- The XLK/S&P 500 relative ratio is turning higher, indicating potential tech leadership into year-end.
- Memory stocks (DRAM) are showing relative strength against semiconductors (SMH), with the ratio turning higher.
- Sandisk (SNDK) is a standout leader in the memory space, working to break out of its trading range.
- The forward PE ratio for memory stocks is showing a higher-low, similar to previous rallies, suggesting a shift in investor perception.
- Sell-side reports indicate DRAM and NAND contract pricing is ahead of expectations, with HBM price growth forecasts increasing.
- Micron's leading-edge capacity is reportedly sold out through the end of the year.