Small-Cap Tech Names To Outperform, Says Turning Point Analytics - Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT), SPDR Select Sector Fund - Technology (ARCA:XLK)

Forget FANG. According to Turning Point Analytics, small-cap tech is the place to be.

In a new report, Turning Point argued small-cap tech stocks are well-positioned to continue to outperform the rest of the tech sector. So far this year, the Russell 2000 TECH Index is up 13 percent, more than double the 6 percent gain of the S&P 500.

Since crude oil bottomed on February 11, the Russell 2000 TECH is up 38 percent, while the NDX, TPA BIGTECH, Russell 200 and Russell 1000 TECH indices are up 20, 28, 29 and 24 percent, respectively.

Turning Point warns traders that small-cap tech may be overbought in the near term, but there is plenty of room for outperformance in the months ahead.

The firm points to a long-term chart of the Russell 2000 TECH/NASDAQ 100 to highlight just how much upside small caps have remaining.

“Chart 6 shows the long term chart of Russell 2000 TECH/NASDAQ 100 and reveals that the bounce since February 2016 coincided perfectly with the lower extreme of a 16 year trading range,” Turning Point explained. “The top of that range is approximately 24 percent higher.”

Traders looking to capitalize on the small-cap tech momentum should consider buying an ETF like the PowerShares S&P SmlCp Inftn Thgy Pfo PSCT and selling the Technology SPDR (ETF) XLK.

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