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LivestreamMenuThe AI trade has been one of the most important sources of upside leadership for the market, but its technical profile has weakened meaningfully in recent weeks. The Global X Artificial Intelligence & Technology ETF (AIQ) has seen a significant correction in both absolute and relative terms, presenting a challenge for the group in the third quarter. AIQ has retreated nearly 19% since peaking last month. The weekly MACD has shifted to a “sell” signal, which is a bearish development for the next several weeks and suggests the correction has not yet fully run its course. The weekly stochastics are also pointing lower, reinforcing the loss of upside momentum after the ETF became extended in June. The composition of AIQ helps explain why the correction has been so important for the broader market. Its top holdings include several stocks that have been central to the AI trade, including SK Hynix , Micron , AMD , Apple , and NVIDIA . This gives AIQ meaningful exposure to semiconductors, AI infrastructure, and mega-cap technology, making it a useful proxy for the broader AI theme. The daily chart suggests AIQ is due for near-term stabilization before the next leg lower unfolds. The ETF has become short-term oversold and is testing support from the daily cloud model, which is a natural area for a bounce to unfold. This should help alleviate some of the immediate downside pressure, but it does not negate the deterioration in intermediate-term momentum on the weekly chart. We would view a near-term rebound as an interruption in the correction rather than the start of a renewed uptrend. Initial resistance is at the 50-day moving average and daily cloud, in the $64-$65 zone. A breakdown below cloud-based support near $57 would officially reverse the uptrend off the March low and increase immediate downside risk toward secondary support near $54, which is defined by former resistance. The relative chart has a similar takeaway. AIQ has broken down versus the SPX after a strong period of outperformance, confirming that leadership has shifted away from the AI trade. The ratio is oversold in the short term, so brief relative stabilization would be natural, but the loss of momentum is meaningful enough to suggest additional underperformance is likely this summer. While AIQ remains in a long-term uptrend, a significant loss of momentum suggests it is prone to an intermediate-term correction. Short-term oversold conditions should allow for stabilization in AI stocks in the very near term, but we would use strength as an opportunity to reduce exposure until momentum improves. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . 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