For investors seeking momentum, Technology Select Sector SPDR ETF (XLK Quick QuoteXLK - Free Report) is probably on radar. The fund just hit a 52-week high and is up 34.75% from its 52-week low price of $112.97/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

XLK in Focus

The Technology Select Sector SPDR ETF seeks to provide investment results that generally correspond to the performance of the Technology Select Sector Index, which seeks to effectively represent the technology sector of the S&P 500. The product charges 10 bps in annual fees (see: all the technology ETFs here).

Why the Move?

Investors are showing renewed interest in the technology sector, which is being driven higher by a combination of factors such as lower inflation, positive corporate earnings, the ongoing crisis faced by regional banks, and the increasing use of cutting-edge technologies. The halting of interest rate hikes presents a favorable outlook for technology stocks. Given that the tech sector heavily relies on borrowing to fuel its accelerated growth, lower interest rates create a cost-effective environment for obtaining additional funds to support further initiatives.

More Gains Ahead?

Currently, XLK has a Zacks ETF Rank #2 (Buy) and it might continue its strong performance given a positive weighted alpha of 20.10.