SCHD Rally Stalls as Technical Indicators Flash Risk

The Schwab US Dividend Equity ETF (SCHD) stalled after reaching a high of $35.33 in August and trading around $34.55 as technical indicators weakened, even as the fund recorded over $20 billion of inflows this year and became the largest dividend ETF by assets.

On the daily chart SCHD has traded sideways since the August peak while remaining above its 50-day and 100-day exponential moving averages. Momentum measures have softened: the Relative Strength Index fell from about 74 at its peak to roughly 57 and has trended lower. The Percentage Price Oscillator produced a bearish crossover and its histogram has remained below zero since Aug. 27. The price action also shows a small gap on Aug. 19 followed by consolidation, a pattern identified as an island reversal.

Key technical references include support near $33 and resistance at $35.33. Technical analysis places an upside reference near $40 if prices sustain a move above the $35.33 high. Market participants will monitor price behavior around the 50- and 100-day EMAs and those price levels for indications of the ETF’s near-term direction.

Investors have allocated cash to SCHD as an alternative to large-cap growth ETFs that hold many AI-related names. The fund’s largest holdings include Merck & Co., Amgen and Abbott Laboratories. Other sizable weightings are in Coca-Cola, Chevron, ConocoPhillips, Verizon Communications and UnitedHealth Group. Information technology represents a smaller portion of the portfolio, with top tech positions such as Texas Instruments, ADP, Qualcomm, IBM, Cisco, Microchip, Paychex and HP.

Flows into SCHD rose to more than $20 billion this year, pushing it past the Vanguard Dividend Appreciation fund to become the largest dividend-focused ETF by assets. Price action and the noted technical indicators will inform whether the ETF resumes its prior advance or trades in a narrower range in the coming days.