This Could Change the Way You Invest in the Tech Sector
Changes are afoot for tech companies on the US stock market. S&P Dow Jones Indices and the Global Industry Classification Standard (GICS) have announced that they will create a new sector for tech, media, and telecom companies on September 28 – the first categorization changes for tech companies since 1999.
S&P and MSCI are eliminating the current Telecoms sector, replacing it with a new subdivision called Communications Services. Communications Services will include companies providing communication platforms, as well as media operators, ultimately forming the largest sector on the S&P 500.
Additionally, the new subdivision will integrate companies from the Consumer Discretionary sector that are presently classified under the Media and Internet and Direct Marketing Retail umbrellas. Some companies listed under Information Technology will also transition to the new sector.
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The changes aim to reflect an era of immune-to-classification fluidity for some of the world’s largest tech companies – something that was foreign in 1999, during the peak of the first tech bubble. While Apple slots easily into the Technology sector and Communications Equipment industry thanks to the moneymaking machine that is the iPhone, companies like Facebook – a social network, media company, and the world’s largest news distributor, all in one – are more difficult to categorize.
The GICS hopes to better reflect the changes of the past 20 years while reminding investors where listed companies earn the bulk of their revenue. David Blitzer, S&P Dow Jones Indices index committee chairman, declared the lines between media, communications, and content to be “blurred”, admitting that “It is time to acknowledge this convergence and the overlapping services these companies provide.”
Facebook and Alphabet will both move to Communication Services from their previous tech sector categorization, with both companies’ sub-industry changing to Interactive Media and Services. Netflix will move from Consumer Discretionary to Communication (along with Disney and 21st Century Fox) while also changing sub-industry from Internet and Direct Marketing Retail to Movies and Entertainment.
The reclassification effort will affect exchange-traded funds designed to specific industries but will not require action from investors, according to investment giant Vanguard. Chris Harvey, Wells Fargo’s head of US equity and quant strategy, also posited that certain companies “may gain mindshare and potentially garner more portfolio-manager interest/dollars” as investors re-familiarize themselves with the stocks. The company estimated that only 10 percent of the S&P 500 will be influenced by the reshuffling, affecting only categorization, not index weights.
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IYW in +1.04% Uptrend, advancing for three consecutive days on December 26, 2024
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where IYW advanced for three days, in of 374 cases, the price rose further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Aroon Indicator entered an Uptrend today. In of 388 cases where IYW Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for IYW moved out of overbought territory on December 09, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 49 similar instances where the indicator moved out of overbought territory. In of the 49 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 69 cases where IYW's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Momentum Indicator moved below the 0 level on December 27, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on IYW as a result. In of 78 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for IYW turned negative on December 18, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at .
IYW moved below its 50-day moving average on December 31, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where IYW declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
IYW broke above its upper Bollinger Band on December 04, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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