Charts Suggest Innovative Tech Stocks Are Headed Higher

Companies that offer innovative technology solutions are some of the best positioned in the changing global marketplace. The charts discussed below will highlight how recent price action has sent prices above key levels of resistance and how these stocks could be poised to make a significant move higher from current levels.

SPDR FactSet Innovative Technology ETF (XTIK)

Active traders who are looking to add innovative tech stocks to their portfolios often turn to exchange-traded products such as the SPDR FactSet Innovative Technology ETF (XITK). As the name of the fund suggests, the fund's managers seek to build a portfolio of companies within sub-sectors with robust revenue growth that may provide leading-edge products and services. Generally, companies conduct business within the tech sector and electronic media sub-sector, and not just within a particular trend.

As you can see from the chart below, the price of the fund has recently risen above a key level of resistance marked by the horizontal trendline. The breakout, illustrated by the blue circle, has triggered a bullish crossover between long-term moving averages, which appears to be a catalyst for buying interest and heightened trading activity as measured by trading volume. Based on this pattern, traders would expect the bulls to remain in control of the momentum, and many will likely protect against a shift in sentiment by placing stop-loss orders below $113.

Zoom Video Communications, Inc. (ZM)

An innovative tech company that has captured the global market's attention in recent weeks is Zoom Video Communications, Inc. (ZM). As you can see from the chart below, the stock is trading within an extremely strong uptrend, which has been supported by an ascending trendline and its 50-day moving average.

Traders will likely continue to use these levels in determining the placement of stop orders over the weeks to come to protect against surprised sell-off. Bullish traders will also want to take note of the breakout above $180, which is highlighted by the blue circle, which is a technical buy signal and could be the start of prolonged move higher.

Zscaler, Inc. (ZS)

Another top holding of the XITK ETF that offers innovative solutions is Zscaler, Inc. (ZS). Unknown to many people outside of the technology sector, the company is a global leader in the cloud-based security services.

Taking a look at the chart below, the price has recent price action surpassed a key trendline on above-average and spiking volume, which suggests that the bulls are in control of the momentum. As confirmation, followers of technical analysis will also want to note the recent bullish crossover between the long-term moving averages because this could mark the start of a long-term uptrend.

The Bottom Line

Innovative technology companies have stood out in recent weeks as people around the world look for new ways of working and staying in touch with others. Based on the charts discussed above, it appears that we could still be in the early stages of a prolonged move higher.

At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.