Chart of the Day - Tuesday, January 6, 2026

By Patrick Dunuwila

January 6, 2026
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🏆 Today's Chart of the Day was shared by Brian Shannon (@alphatrends).
 

  • The Technology sector ($XLK) is approaching a critical decision as price tightens toward the apex of a multi-month coil.
     
  • With software stocks making up a significant share of the sector, rotation into this beaten down industry would be constructive for $QQQ, which was the only major index unable to register a new all-time high in December.
     
  • At the same time, Tech's contraction has coincided with improving market breadth, highlighted by fresh record highs in the Equal Weight S&P 500 ($RSP) today. This healthy backdrop supports an upside resolution to the prolonged consolidation in $XLK.
     

The Takeaway: The combination of expanding breadth and a coiled Tech sector points to a healthy rotation of leadership and sets the stage for Tech to reassert its dominance. 

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Patrick Dunuwila

Editor, The Chart Report

Patrick Dunuwila is the Co-Founder and Editor of The Chart Report, a popular technical analysis newsletter read by thousands of investors worldwide every day. Patrick is a Chartered Market Technician (CMT) with over a decade of market experience. Prior to launching The Chart Report, he worked as a proprietary trader at Benchmarq Technologies in New York City. He's originally from Syracuse, NY, and currently resides in San Diego, CA.

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