SCHD near record highs as cup-and-handle forms

The Schwab U.S. Dividend Equity ETF (SCHD) traded at $32.30 on Monday, close to its year-to-date high. Daily charts show a cup-and-handle pattern with the cup forming from March 2 to April 30 and a handle developing in May.

SCHD has been trading above its 50-day and 100-day exponential moving averages. After clearing the cup, the ETF is retesting its prior high and displaying a flag pattern on short-term charts. Market technicians cite $32 as a key resistance level; some have identified a longer-term technical target near $40.

The fund has returned about 19% year to date, compared with roughly an 8.4% gain for the S&P 500 and about a 15% rise for the Nasdaq 100. SCHD added about $10 billion in assets so far this year, with most inflows occurring earlier in the period. More recent net flows into equities have favored large-cap technology names, narrowing SCHD’s inflows.

SCHD has limited exposure to the technology sector. Its largest technology holdings include Qualcomm and Texas Instruments rather than the biggest cloud and semiconductor giants. Some leading technology stocks, including Micron Technology and Nvidia, have entered corrective phases. Analysts at Barclays and Goldman Sachs have warned that the pullback in technology could be deeper than expected, which market participants say may shift demand toward value and dividend-paying funds.

On dividends, SCHD’s five-year compound annual growth rate for payouts is about 8.6%, compared with a sector median near 7%. The ETF tracks a dividend-focused U.S. equity index that selects stocks for yield and quality factors and is frequently used by investors seeking income with equity exposure.

Traders and investors are watching price action around the $32 level and the evolution of short-term chart patterns as they assess potential near-term moves.