The Roman philosopher Seneca wasn’t talking about the stock market when he wrote that “T...
Tech Picks for 2011
01/10/2011 9:38 am EST
Chart Analysis: Which sectors should be part of your portfolio for 2011? This is sort of a no-brainer, as I expect that in 2011, like most years, there will be some tech stocks that are standout performers for the year. This does not mean that the technology sector will necessarily be the best-performing sector for 2011, but some tech stocks are likely to shine. As part of this week’s Trading Lessons article, I will detail those stocks that I think should comprise your tech portfolio in 2011. If you would like to receive the full list, please sign up here. All of these stocks were selected using a long-term technical analysis criteria.
Micron Technology (MU) was one of the tech boom’s darlings when it reached a high of $97.50.
- MU gapped higher last week and closed near the highs, breaking its short term downtrend
- Initial resistance is at $8.80 with the long-term weekly downtrend at $10.60
- On-balance volume (OBV) completed a major base formation last fall
- Initial support is at $8.00-$8.30 with stronger support at $7.08 to $7.65
What It Means: The strong pattern of accumulation suggests that MU may be a standout performer in 2011, and I would not be surprised to see it reach the Fibonacci target at $13.85, if not the July 2007 highs at $14.20.
How to Profit: By investing in a select group of technology stocks that have favorable long-term technical patterns, I think you will be well positioned in tech for 2011. I would look to buy Micron Technology at $8.36-$8.43 with a stop at $7.33.
Tom Aspray, professional trader and analyst, serves as senior editor for MoneyShow.com. The views expressed here are his own.
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