Picking a good trade using technical analysis often involves more than looking at price alone, according to technical analyst Todd Gordon. And that's why he's looking at tech stocks now, specifically the ETF tracking the Nasdaq 100 (trading under the symbol QQQ).
When looking at an index, Gordon pays close attention to its advance-decline line. This indicator charts the number of stocks that are trading up minus the number that are trading down for a given period of time.
"That shows you breadth or if there's widespread participation on a bold move," he said. Gordon notes that the QQQ rallied in April and sold off. However, that selloff wasn't confirmed by the advance-decline line. In late May, the same thing happened again.