Aug

12

Money Flows Toward $DOT Index

Pete @ 2:29 PM | | Start a Discussion 

Money rotating out of hot sectors is generally put to work elsewhere quickly. Looking at the Trading Ideas for Tuesday, we can see the stampede out of basic materials (gold & silver, metal mining, steel, chemicals) and energy (oil, coal).

Where it the money going? It seems like some of this money went into tech stocks. We can see this from the recent price action from the PHLX TheStreet.com Internet Index ($DOT). Momentum players love watching where the action is and it seems like technology will always be one of their favorite areas to trade.

The PHLX TheStreet.com Internet Index has 21 constituent stocks. The key is the recent outperformance of the software & programming industry: eight stocks in $DOT belong in this sector.

TheStreet.com Internet Index ($DOT)

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Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

I have marked off on the $DOT chart the first resistance level (graylLine) that the bulls will be watching very closely.

Symantec Corporation (SYMC)

  • Symantec profit rises as it signs more big deals
    Symantec Corp (SYMC), the world’s largest security software maker, reported higher quarterly profit on Wednesday, beating Wall Street expectations, as it signed more large contracts.
  • Symantec Moves Into Endpoint Virtualization
    Symantec today announced that it is buying nSuite, a privately-held virtual workspace management company, in a move some analysts see as a bid to ensure its future. The acquisition, scheduled to close later this month is for an undisclosed amount in cash.

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Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

International Business Machines (IBM)

  • IBM profit tops targets, forecast up
    IBM reported a 22 percent rise in quarterly profit, blowing past Wall Street targets and raising its 2008 forecast, as emerging markets used its services, software and equipment to expand, and larger countries turned to technology to save money.
  • IBM to buy France’s Ilog for $340 mln
    U.S. computer services and software group International Business Machines (IBM) has agreed to buy French software maker Ilog (ILOG) for 215 million euros ($340 million), the two companies said on Monday.

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Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

Oracle Corporation (ORCL)

  • Oracle’s Net Income Jumps 27%
    Oracle Corp. reported that fourth-quarter profit climbed 27% but issued a more conservative forecast that suggests some technology companies may be in for a tough summer.

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Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

Adobe Systems (ADBE)

  • Adobe’s Net Rises 41% On Overseas Sales
    Adobe Systems Inc.’s fiscal-second-quarter profit jumped 41% as the company’s strong sales overseas again provided a boost.
  • Adobe, Google, Yahoo Team for Flash Search
    Adobe, Google and Yahoo join to make Flash content searchable. Adobe, Google and Yahoo immediately make Flash and other dynamic content that runs in Adobe Flash Player on thousands of Web sites visible to search.

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Daily bar chart with InVivo.RMI.Stops and InVivo.RMI.Histogram applied

The key thing to watch is this: if the broad markets pull back, will the technology sector emerge as a leader or laggard? As always, you have to keep risk in mind by having a plan in place and paying attention to the Investor Sentiment Cycle in the markets.

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