While it is time to start looking at stocks in this sector, I recommend investors be very selective because there may still be some downside for a number of stocks before they turn. Technology stocks have fallen heavily in the US, with the sector down over 30%, and many household names have technically crashed since the start of this year. Meta, or Facebook as we know it, is down over 60%, Netflix is down over 50%, while Alphabet, formally known as Google, and Amazon are down over 30%, just to name a few.
The Australian technology sector has followed the US, down over 30% since January 1. Appen Ltd has fared the worst, down over 70%, Xero Ltd is down over 45% while Altium Limited (ASX:ALU) is down over 23% and Wisetech Global Ltd, which is faring the best, is down just under 3%. The question remains whether the fall in technology stocks is over or should investors brace for more downside.
After reaching an all-time high of 2,450 points in August 2021, the technology sector (XIJ) fell to a low of 1,242 points in June of this year. This represents an almost 50% fall over 10 months, which means investors have suffered heavy losses – although the news is not all bad. The XIJ has very strong support, just above 1,200 points, and so far it has continued to hold above this level.
