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Summary

Short selling and put buying indicators continue to signal further upside for the technology sector rally.

Current levels of bearish sentiment, measured by short fund activity and tech put buying, remain elevated and not yet contrarian-bearish.

Both indicators have declined post-rally, but neither has reached levels typically associated with market tops.

Contrary opinion theory suggests the rally persists until bullish sentiment becomes extreme, which has not yet occurred.

Daniel Balakov/E+ via Getty Images

Before this rally started, we wrote four articles that high levels of “short selling” and “put buying,” especially in the technology sector, were forecasting another strong tech rally.

(Short selling and put buying point

Analyst’s Disclosure: I/we have a beneficial long position in the shares of QQQ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions.…