The big tech stocks are making serious moves right now. A couple of months ago I went over the reasons why I thought the Nasdaq100 was getting ready for a big breakout. The household names in the index are reporting their quarterly earnings so we’ll know soon if this is it or if we need a little bit more consolidation.
Bespoke Investment Group points out that the S&P Technology Sector is closing in on its 2007 highs – where were before the financial crisis began:
“The S&P 500 Technology sector has gotten off to a great start to 2012. While it has gotten a bit overbought in the short term, the sector is closing in on a key resistance level that bulls would love to see broken. This resistance level is the sector’s pre-financial crisis closing high of 441.36, which is just 1.59% away from where the sector is currently trading.“
The big components are going to be the key here: $AAPL $GOOG $MSFT $INTC $ORCL $AMZN $QCOM $CSCO – new highs in these names is what will take this index to the promise land. This is important because once key resistance is broken on a weekly basis for the Nasdaq100, that former resistance should become support in the future.
We’ll discuss that when the time comes. For now, we need to look out for head-fakes in the index. It’s pretty extended here after close to a 20% move since early October. Further consolidation wouldn’t be the end of the world.
Update: $GOOG down big in after market trading, $MSFT and $INTC higher – all 3 just reported quarterly earnings.
Tags: $XLK $QQQ $NDX