Technology ETF (XLK) Could Hit $180 After Setting a New 52-Week High

Investors will be eying the Technology Select Sector SPDR ETF (XLK) after it rallied to a new 52-week high above $170 earlier today.

XLK Touches the $172 Mark

The Technology Select Sector SPDR ETF (XLK) is one of the best-performing funds in the tech sector at the moment. XLK hit a new 52-week high of $172 earlier today, after rallying by more than 7% over the past month.

XLK’s value is up by 44.5% from the 52-week low of $119.04/share. The ETF tracks the performance of the Technology Select Sector Index that comprises companies from numerous industries, including wireless telecommunication services; electronic equipment & instruments; computers & peripherals; software; diversified telecommunication services; communications equipment; internet software & services; IT services; semiconductor & semiconductor equipment; and office electronics.

The fund has an expense ratio of 0.12%, making it one of the cheapest ETFs in the technology sector. XLK has performed excellently in recent weeks, thanks to the tech stocks in the United States delivering some excellent gains to investors. The XLK focuses on the stocks of companies operating in the information technology sectors and major focuses on in growth and value stocks of companies with varying market caps.

XLK Could Rally Towards $180

The recent rally was caused by nationwide COVID-19 lockdowns in Europe, which has caused fears about the further spread of the virus. The new restrictions in Europe are affecting the financial markets in other parts of the world.

As a result, investors are starting to focus their attention on internet and tech stocks since they are the winners during a pandemic. These companies continue to perform as they require less human contact than other sectors of the global economy.

As a result of the focus shifting to the tech and internet stocks again, funds such as XLK are performing excellently. XLK could rally towards the $180 level over the coming weeks if the current market momentum is maintained. If there are further lockdowns in more countries, tech stocks will rally higher, and that would see XLK reach new highs.