Feb. 14 at 5:35 PM
🌀 Sector Rotation Is Here — Now What?
$QQQ $SPY
Over the last week we finally saw the rotation we’ve been talking about — capital moving out of long-elevated tech valuations and into areas that had been ignored. When broad markets shift like this, opportunities emerge in both derated growth names and oversold value plays.
Historically high P/E tech names have pulled back, trimming valuations and offering better entry points — but only if we watch support, resistance, and earnings catalysts closely. Here are some of the names radar-worthy right now.
📉 1) Salesforce (
$CRM)
Valuation shift: Salesforce, once pricing premium SaaS growth at sky-high multiples, has seen its P/E compress considerably from its earlier historical highs. The trailing P/E sits in the mid-20s today—well below the multiples it commanded during peak growth optimism — as sentiment cooled with softer guidance and AI monetization skepticism.
Why It Matters: High growth software stocks historically trade at rich multiples — and when those evaporate, long setups can form if buyers step in near support.
Key Levels to Watch (Technical):
Support zones: ~
$212–218 demand zone where buyers previously stepped in.
Resistance:
$276 area first, then ~
$296 if a trend reversal accelerates.
Upcoming Earnings: Fiscal Q4 reporting expected around Feb 25, 2026 — a potential volatility catalyst where setup decisions matter.
Bullish Setup: A sweep of the lower support band holding could signal a value-oriented rebound as growth expectations stabilize.
🍿 2) Netflix (
$NFLX)
Valuation shift: Netflix’s P/E has pulled back from the lofty 40-plus range of recent years to around ~30x today. That’s still above broad market but significantly cheaper than the peak levels seen when growth narratives dominated pricing.
Technical Levels:
Support: Recent lows around the
$70S — a critical base to watch for buyers.
Overhead resistance: Prior resistance coming up around the
$85–
$90 zone (recent short-term swing highs). (Market context)
Upcoming Earnings: Estimated next print after market close on Apr 16, 2026 — a key event where results and guidance could drive momentum either way.
Note: NFLX was trading at significantly higher P/E earlier when the streamer commanded premium growth expectations.That contraction has opened up tactical swing entries for traders focusing on volatility around earnings.
📊 Why This Matters for Sector Rotation Playbooks
High-PE growth stocks derating: Rotation often pressures richly priced growth names first — slicing P/E multiples and widening technical ranges. (Context)
Support becomes tactical entry points: Instead of chasing breakouts, watching structural support on good earnings near-catalysts gives opportunities for asymmetric risk/reward.
Earnings are inflection moments: Results can reset sentiment quickly in tech — especially when forward guidance contradicts or confirms current narrative.
🧠 What to Track Next
✅ Sector breadth & rotation data — macro shifts often precede directional moves.
✅ PE expansion/contraction signals — cheaper valuations can attract selective buyers.
✅ Support/Resistance + Catalysts — almost every trade idea here hinges on these technical anchors and fundamental news flow.
📝 Bottom Line
We saw sector rotation in real time — growth bears some of the pressure while value and beaten down areas start to find footing. Recognizing when big valuation names are cheap relative to their history — and pairing that with support levels and upcoming earnings reports — can help you navigate this phase with better odds. Keep an eye on CRM around support and the late February earnings print, and monitor NFLX into April for swing setups off P/E contraction zones.
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