Chart of the Day - Thursday, July 15th, 2021

Today’s Chart of the Day was shared on Twitter by Steve Strazza (@sstrazza). It's a daily candlestick chart of the Dow Jones Internet ETF, $FDN, over the past nine months. The top-weighted holdings in this ETF include, $AMZN, $FB, $GOOGL, $PYPL and $NFLX. Steve points out that $FDN has formed a failed breakout. A failed breakout, or bull trap, as it's also called is when price breaks out, but fails to hold above the breakout level, thus trapping the bulls who bought the breakout. It's often said; "From failed moves come fast moves in the opposite direction." In a comment to The Chart Report, Steve said, "This isn't the only tech-related ETF sporting a failed breakout right now, just take a look at the Software ETF, $IGV, and the Semiconductor ETF, $SOX. What's notable about $FDN is that it holds so many of the Mega-Cap stocks that have been propping up the major indices recently, and it still can't hold its recent breakout. $FDN will need to reclaim its February highs (around $245) soon, or we could see some more pronounced selling in the coming days/weeks."