Tech Stock Investing: Cisco and Hewlett Packard are looking like the next hot stocks
By Adam Lass
A Taipan Financial News Market Report (Sign up Free!)
In this article:
The S&P 500 has joined the DJ Industrials and the DJ Transports by setting a new post-2000 high,
It may hurt to carry downside protection, but if you aren’t perfect, you ought to do it anyway,
The lagging Nasdaq is offering some very intriguing opportunities right now.
Tech Stock Investing: Cisco and Hewlett Packard are looking like the next hot stocks
Congratulations yourselves, folks: You have finally pushed the Standard & Poor’s 500 past the highs of 2000. Now the only major list still lollygagging in the shadows of previous glory is the tech-heavy Nasdaq.
While the Nasdaq has certainly logged in some decent 52-week highs, unlike such luminaries as the DJ Industrials, the DJ Transports, and the aforementioned S&P 500, it is still some 2,500 points away from its 2000 high of 5,132.
For months I’d wonder quietly to myself as to where these indexes would eventually meet. Would the lone Dow fade back from its prominence and rejoin the mean? Or would the Blue Chips successfully drag the other sectors kicking and screaming into a new era of wondrous prosperity?
At this point, I must concede that the latter scenario seems to be coming true. Oh there will be a cost for this prosperity. Indeed, we are already seeing it in the form of an ever-decreasing dollar and ever-increasing costs.
Tech Stock Investing: Are you perfect?
But if you are one of the blessed few who can raise your prices faster than the other guys can raise your costs, then you are indeed golden, for a while anyway. And what the heck: you are also probably one of those special people who know exactly when to sell at the very, very top, before everything slides back into the morass.
The rest of us, on the other hand, have to act with a bit of caution. We must pretend like we are mortal, and waste time and energy protecting ourselves from falling into the ever-widening chasm that is forming below us.
In plain English, that means buying a few puts every now and again to go with our collection of shares and calls, knowing full well that these puts may very well be destroyed the next time the market enjoys another joyous upside spasm.
----------------------------
Read on… Get Market Report everyday! Sign up Free!
------------------------------
Stinks to watch ‘em get chewed up. But the world is littered with guys who thought they were soooo special that the laws of probability didn’t apply to them. Golden Ben Roethlisberger for example, who, as I recall, swore he didn’t need a helmet when he was drinking and riding his motorcycle.
Tech Stock Investing: The next sweet spot
That said, there is no point to carrying protection if you have no plans for the weekend, as it were. And that lagging sector, Nasdaq and the tech stocks have caught my eye. If these indexes insist on converging on the mountain top rather than the valley, a good date for Saturday night might very well be Cisco Systems (CSCO:NASDAQ) or Hewlett Packard (HPQ:NYSE). Both are reasonably well built, but still have enough of a gleam in their eyes to indicate that a good time might be had.
Indeed, the last time Cisco put in signals par with its current set up, it rallied more than $10 over six months, good for a near double. As for HP, $50-55 in short order is not out of the question at all.
So go have fun, but as my dad used to say, “Be careful out there, Son, and try to be home before sunrise.”
***
Adam Lass is the founder and manager of the WaveStrength Group, and is a contributing editor for Taipan Financial News. As the creator of WaveStrength’s proprietary analysis system, Adam’s expertise has shaped a franchise of successful investment newsletters and services, including WaveStrength Options Weekly and WaveStrength Apex.
Did you like this article? Get Market Report everyday! Sign up Free!
Related Articles
Tech Stock Investing: Vonage Is On A Slippery Slope
Tech Stock Investing: Google Buys DoubleClick
Tech Stock Investing: Rare Earths Are Pivotal To Technology
Related Resources
Tech Stock Investing: The lagging Nasdaq may very well offer easy pickings.
Tech Stock Investing: Ready to put on $10…
Tech Stock Investing: And another $10 here too…