SCHD Stalls at $34.55 Amid Bearish Technical Signals
The Schwab US Dividend Equity ETF (SCHD) has stalled in its rally after reaching a peak of $35.33 in August, as technical indicators suggest a possible bearish breakout.
Despite strong inflows of over $20 billion this year, the ETF's daily chart shows a sideways movement since peaking at $35.33, with the Relative Strength Index (RSI) dropping from 74 to 57 and pointing downwards.
The Percentage Price Oscillator (PPO) has also formed a bearish crossover, indicating a potential reversal in the trend. The fund's formation of an island reversal pattern after a small gap on August 19 further supports this view.
However, SCHD's defensive dividend rotation strategy may continue to outperform due to its positioning as an 'AI-risk hedge', with holdings in companies like Merck, Amgen, and Abbott Labs, which are less exposed to AI-related risks.