Cloud stocks soar as Workday gets an upgrade. One chart suggests more gains for the group

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Cloud stocks are 'setting up for outperformance into the end of the year' based on a key chart, says Miller Tabak's Matt Maley.

SKYY "did pop up a little bit at the very, very end of the month, and then when the whole market started to come back down, it came back down. But again, it got right back into that sideways range," Maley said. "On a technical basis, this is really good. In other words, it didn't get ahead of itself as much as a lot of the other technology stocks did."

The key level to watch in SKYY is $80, the top end of its trading range, Maley said. The ETF traded at $79.66 on Friday. "If it can break above that, it's going to be very bullish," he said, adding that it's already set up "very, very nicely" to outperform the mega-cap names. "September sell-offs tend to bottom out in October," he said. "Whether the tech bounce-back's starting now or later in the month, either way I think the cloud computing group is really setting up for outperformance into the end of the year."Quint Tatro, chief investment officer of Joule Financial, emphasized in the same "Trading Nation" interview that the cloud space is a "very, very broad category.

While SKYY invests in larger-cap, slower-growing stocks, CLOU's top holdings are riskier and more cutting-edge names such as

 

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