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Don’t sweat the tech drop? Why one chart expert sees a big buying opportunity

Tough run for tech
Tough run for tech

Technology stocks are dragging the market down, but there may be a buying opportunity afoot.

Apple, Microsoft, Facebook and Intel had among the most negative impact on the S&P 500 on Thursday, and the tech-heavy Nasdaq composite is on pace for its second-straight negative week. Some investors have begun to wonder if the sector's market leadership this year may be coming to an end.

But according to Oppenheimer head of technical analysis Ari Wald, this dip is a healthy and temporary one for the group.

"This is temporary, run-of-the-mill, healthy pullback following what was a terrific run for this group," Wald said Thursday on CNBC's "Power Lunch." "Ultimately, we think the long term trend does resume higher."

The Nasdaq 100 on Thursday was led to the downside by Apple, Microsoft and Facebook. Examining a chart of the QQQ, the exchange-traded fund that tracks the index's movement, Wald said the key level to watch is $133. The fund, shares of which closed Thursday at $136.29, has advanced 15 percent year to date.

That $133 level "would line up with the breakaway gap from April. This would still only be a minor retracement of what was a terrific rally into its most recent highs," Wald said. "Ultimately, we think the long-term trend does resume higher."

Furthermore, the ETF is trading above a 200-day moving average, Wald said, which could indicate that its uptrend remains intact.

On the other hand, technology names could fall further as some technology giants broadly appear under pressure, said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management.

"Tech just seems to be under assault from every angle. Google [is] under regulatory pressure. Apple needs a huge hit with the iPhone 8, and at $1,000 a pop, I don't know if they're going to be able to get that. And Tesla, as you see, is kind of leading the way to the downside," he said Thursday on CNBC's "Power Lunch."

It appears, he said, that the group's momentum has shifted, which could usher in further bearish sentiment and further downside.