This chart shows that tech stocks need to stay above a key level

The S&P 500 closed the week essentially unchanged, the Dow Jones industrial average rose slightly and the Nasdaq Composite was just a hair negative. As crude oil turned in its fourth straight week of losses, Miller Tabak equity strategist Matt Maley discusses three key themes he is watching for next week, focusing in on one technical indicator.

1. Tech support

Maley pointed out that a popular exchange-traded fund that tracks technology stocks, the XLK, has recently tested its 50-day moving average to the downside. The moving average has acted as "key support" for tech stocks all year, Maley said, "so it will be important that it continues above this line."

"The tech stocks have attracted a lot of leverage with their uninterrupted rally this year. If the XLK breaks below this line, it will cause some of that leverage to be unwound. This, in turn, could lead to a larger than expected correction in the group," Maley said Friday on CNBC's "Trading Nation."

The XLK closed slightly lower, at $55.25 on Friday; the moving average comes in at $55.07.

2. Emerging trouble?

Emerging markets have so far this year been a popular trade, but may be coming under pressure from recent signs the U.S. dollar is strengthening, Maley said.

"If the dollar continues to rally, this could cause the emerging markets ETF to break below its fifty-day moving average, which has been key support," Maley said Friday.

A U.S. dollar gaining in value relative to foreign currencies is typically negative for emerging markets, as it pushes down the value of their commodities and raises their dollar-denominated debt. The EEM has gained more than 18 percent this year and closed Friday slightly positive.

3. Low energy

Crude oil just turned in its longest weekly losing streak since August of 2015, but one popular energy-tracking ETF may be showing signs of looking up, Maley said.

"There's been a lot of negative news on the supply and demand equation for crude oil. However, the XLE energy ETF, which has been a good leading indicator for crude oil, outperformed last week for the first time in months," he said.

If the XLE were to finally break above its 50-day moving average, Maley said, it could be a signal that oil is finding a "bottom" and may head higher from there.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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