SEDG Surges While Tech Stocks Retreat, Driven by Strong Institutional Investment

Tech Sector Weakness Highlights Standout Stocks

The technology industry is currently experiencing significant selling pressure, with the US Tech index falling below a major support threshold. Despite this, the decline lacks strong momentum, hinting at the possibility of a short-term rebound due to oversold conditions. In this environment, any stock showing resilience is likely to attract attention. The software segment, after a brief rally, has reversed course, and only 29% of tech stocks remain above their 50-day moving average, making upward trends increasingly rare. The XSD Equal Weight Semiconductors ETF has fallen 13% since its February high, and a drop below its 200-day moving average could send semiconductor shares back to levels last seen in November.

Against this backdrop, SEDG and ATEN are emerging as notable exceptions. Their ability to move higher while the broader sector struggles suggests a unique supply and demand dynamic. Although the overall trend is downward, these two stocks are displaying breakout behavior that traders often seek. Key resistance levels for SEDG and breakout targets for ATEN could mark the beginning of more sustained upward moves, even as the sector remains weak.

SEDG: Defying Sector Weakness with a Breakout

While most tech stocks are capitulating, SolarEdge Technologies is breaking out decisively. The stock has surged 65% in just two weeks, surpassing important resistance and turning its medium-term trend into a clear buying opportunity. This move signals strong buyer conviction, not just a fleeting bounce.

SEDG is now approaching a crucial resistance area in the low $60s. Whether it can maintain its upward momentum through this level will determine if the breakout continues. A successful move above resistance would confirm the bullish setup and pave the way for further gains. Conversely, failing to hold above this threshold could trigger a reversal and return the stock to its previous consolidation range.

Trading Strategy Overview

• Entry: Close above the 20-day upper Bollinger Band and RSI(14) above 60
• Exit: Close below the 20-day lower Bollinger Band, after 20 trading days, or upon reaching a 30% profit or 15% loss
• Universe: SEDG, ATEN
• Period: March 23, 2024 – March 22, 2026

Backtest Results

• Strategy Return: -4.66%
• Annualized Return: 22.37%
• Maximum Drawdown: 49.42%
• Profit-Loss Ratio: 1.07

Trade Metrics

• Total Trades: 20
• Winning Trades: 9
• Losing Trades: 10
• Win Rate: 45%
• Average Hold Days: 10.1
• Max Consecutive Losses: 3
• Average Win Return: 19.32%
• Average Loss Return: 14.03%
• Largest Single Gain: 47.12%
• Largest Single Loss: 23.2%

High trading volume and volatility—turnover at 16.81% and one-day volatility at 16.06%—suggest institutional investors are actively participating. Recent price changes of 38.17% over five days and 36.49% over twenty days indicate sustained momentum, not just a brief spike. Buyers are absorbing selling pressure at higher prices, signaling a shift in market dynamics.

SEDG's technical indicators point to robust strength. The breakout is supported by volume, and the trend channel remains intact. The next critical move depends on whether the stock can break through the $60 resistance. Success would likely draw more buyers, while rejection could lead to a retest of support near $45.00. Currently, the balance favors bullish sentiment.

ATEN: Standing Out in a Struggling Software Sector

Amid widespread declines in software stocks, ATEN International is the only name moving higher this year, making its technical setup particularly noteworthy. The stock is nearing a breakout above the $22 resistance, which would mark a significant shift in trend. This is happening as the broader B2B software sector is down 15–20%, with valuations dropping sharply.

Most software companies are experiencing deep corrections, with multiples falling from pandemic highs. ATEN's upward movement signals a distinct supply and demand imbalance. Its ability to outperform peers may be due to strong earnings, operational improvements, or a shift toward infrastructure investments. This relative strength could attract momentum investors and extend the rally.

The technical outlook depends on whether ATEN can break above $22. A successful move would confirm the breakout and likely bring in additional buyers, aiming for the next psychological price level. If the stock fails to hold above this resistance, it may simply be a temporary countertrend rally within a broader decline. Volume and price action will reveal the true direction. For now, bullish sentiment prevails, but clearing this key level is essential to prove lasting strength.

Key Drivers and Risks: What Could Confirm or Undermine the Breakouts

The bullish setups for SEDG and ATEN are at a pivotal moment. Both stocks face tests from their technical levels and the ongoing sector-wide selling pressure.

• SEDG: The immediate catalyst is whether it can break through the low $60 resistance zone. Its recent 65% surge has turned the trend channel bullish, but this level will determine if the move is sustainable. A clear break would confirm the breakout and attract momentum buyers, while a rejection could force a retest of support near $45.00. Elevated turnover and volatility suggest institutional interest, but the stock must clear resistance to maintain its momentum.
• ATEN: The catalyst is more fundamental, as its rise is a story of relative strength. Upcoming earnings will be crucial. Analysts at Wolfe Research believe cost-cutting and margin improvements may be underestimated in the sector, which could benefit ATEN. Strong earnings or guidance would reinforce the breakout and push the stock toward new highs. A disappointing report would undermine the relative strength thesis, especially in a sector facing heavy losses.

The main risk for both stocks is continued broad-based selling in the tech sector. With only 29% of tech stocks above their 50-day moving average and the software segment reversing lower, the environment remains challenging. Wolfe Research warns that US equities may still have room to fall, as investor fear hasn't reached levels typical of lasting market bottoms. If the broader selloff resumes, it could overshadow any relative strength and drive stocks back toward recent lows. The fate of SEDG and ATEN depends on their ability to withstand sector weakness and maintain their breakout trajectories.