Truist upgraded the technology sector on Thursday (NYSEARCA:XLK) from neutral to overweight after a double-digit sell-off.

In June, the firm reduced its technology position to neutral from overweight following a sharp rise against the S&P 500 (SP500)(SPY)(VOO).). Truist said Thursday the downgrade came because the company’s work suggests the sector has “outpaced itself” in the near term, posting its best one-month outperformance since 2002.

“The bar for positive surprises was set too high, resulting in a strong exodus from the sector,” said Keith Lerner, chief market strategist at Truist, in a statement on Thursday.

Now the sector is down 12% from its mid-July peak, with semiconductors down nearly 20%. “That’s offset by continued rising earnings estimates for the technology sector, which currently remain at all-time highs,” he said. “That suggests the recent pullback is more a result of over-commitment than a change in fundamentals,” he said.

Technically, the technology sector has entered a slightly oversold state, with the percentage of the group’s stocks trading above their 50-day moving average falling to 22 percent from 94 percent in mid-July, he said.

“This is a sign of indiscriminate selling. Frankly, the sector was even more oversold at previous lows. This could certainly happen again, which means the correction may not be fully complete yet,” Lerner said.

“Nevertheless, we believe the risk-reward ratio for the technology sector has improved and the long-term trend remains intact,” he said.

Since the beginning of the year, the S&P 500 Information Technology (XLK) sector has risen by about 17%, while the S&P 500 (SP500)(IVV) has gained 11.5%.