As technology stocks dive and the tech-heavy Nasdaq Composite is set to log its first monthly loss since October, some strategists are forecasting further weakness for technology in the near term — with an upward resumption further out.
"The sector is in for what I call an intermediate-term correction," Robert Sluymer, technical strategist at Fundstrat Global Advisors, said Thursday on CNBC's "Trading Nation."
"That is not the end of the world," Sluymer said. "It doesn't mean that you have to sell all of the tech stocks that you own, but when you look at the very long-term for tech, from a technical standpoint, technology has run to the upper end of a very long-term trend line that goes all the way back to 2009."
Examining a chart of the S&P 500 information technology sector and its 40-week moving average advancing within a channel he highlighted back to the beginning of 2009, Sluymer pointed out that it may consolidate around its current levels. However, he believes its recent movement suggests a pullback is ahead.
As several technology heavyweights such as Google, Facebook, Netflix and Apple have already fallen below their 50-day moving averages, Sluymer predicted many names in the tech space could see a correction of 10 to 15 percent from here.
"That only takes it down to the 200-day moving average, which is really nothing substantial from the point of investing," he said, adding the long-term trend is still upward, and he would buy the names in an uptrend, but "now is not the time."
The technology sector is still the best-performing sector year to date, with health care a close second.
Tech is due for further consolidation at this juncture, said Max Wolff, 55 Institutional market strategist. However, he likes the group in the long term, as he sees potential for growth.
"The overall market is way out over its skis from a historical basis, an average basis, a multiple basis, a duration of gain basis, a duration of expansion basis," Wolff said Thursday on CNBC's "Trading Nation." "But one thing we know as a perennial winner is to bet on abnormal profitability and/or abnormal growth, and we're seeing a good bit of both in the tech space."
"The portion of the economy that is tech, one way or another, whether it is [artificial intelligence] or changes in entertainment, or changes in manufacturing, continues to grow," he said, adding that technology is indeed overbought, "and the only caveat we would add to that is, so is everything else."
For the setup to a trade he planned to execute Thursday, TradingAnalysis.com founder Todd Gordon said he would bet against Apple amid the current struggling tech space. He pointed out that the $143 stock has fallen into a consolidation around the mid-$140's area, and has been unable to retake the high of $155.98 it reached in early June.