The major stock indexes have surged higher over the past two weeks. The leader of this move has been the highly followed NASDAQ Composite. The tech heavy NASDAQ Composite soared higher by 367.0 points in just nine trading days. This is a remarkable rally for any index in such a short period of time. When the NASDAQ Composite leads the major stock indexes higher it is usually viewed as a short term sign of strength for the overall stock market . The opposite is true when the Dow Jones Industrial Average leads the markets higher, this is a sign of coming weakness as investors seek yield and not growth. This week, we shall examine three leading tech stocks to find their near term resistance levels and locate the best entry points for trades. Traders must remember, when the NASDAQ pulls back, this is when the major stock indexes will pullback as well.
Apple Inc (NASDAQ:AAPL) is the world’s most popular technology stock. This company also has the largest market capitalization in the world at $391 billion. Traders and investors must follow the APPL stock very closely because it carries the most weight in technology heavy NASDAQ 100 Index (NASDAQ:QQQ). Apple Inc will report earnings on October 18, 2011 after the closing bell. This stock will very often trade higher into its earnings report. Last week, Google Inc (NASDAQ:GOOG) reported better than expected earnings. This has certainly raised the bar for APPL stock and many other leading tech companies. In any case, the stock has already soared higher by $68.00 since the October 4, 2011 pivot low of $354.25 a share. Last week, APPL closed at $422.00 a share. Who can really tell how good the APPL earnings will be What we can tell is where the resistance levels are likely to be. Traders should watch for near term resistance around the $425.00, $433.00, $445.50, $455.00, $467.75, and and $477.00 levels. When it comes to a high priced technology leader such as Apple Inc the stock certainly has the potential to rally. Should the stock decline after the earnings report traders must continue to watch for daily chart support around the $390.00, and $370.00 levels. The $370.00 level has been defended by the institutions recently. Until the stock breaks below that area on a closing basis traders must expect it to be major support. Place these levels on your charts, watch as the stock reacts, trade them accordingly.
VMware Inc (NYSE:VMW) is a leading provider of virtualization-based cloud infrastructure solutions. This stock has also soared higher by $15.50 since the October 4, 2011 pivot market low of $77.50 a share. Last week, VMW stock closed at $93.08 a share. VMware Inc is scheduled to report earnings after the close on October 17, 2011. The near term resistance levels for the leading tech stock are $96.60, $102.00, $106.50, $112.00, and $117.00. It is always important to remember that we can never know how a stock will react after an earnings report. Therefore, should the stock sell off or retreat from current levels their will be near term support around the $84.00, and $77.00 levels.
Sandisk Corp (NASDAQ:SNDK) is a another leading technology stock that is scheduled to report earnings on October 20, 2011 after the closing bell. This company is one of the leading developers and manufacturers of NAND-based flash data storage card products that are used in various consumer electronics products. SNDK stock has rallied higher by $9.00 since trading as low as $37.63 on October 4, 2011. SNDK stock will face some near term resistance around the $50.00, $53.25, and $57.75 levels. Should the stock decline from current levels traders should watch for support around the $44.00, and $37.00 levels.
These are your levels for trading the tech stocks. Take careful note of the levels mentioned, they will all present trading opportunity. However, you must understand the factors which can determine, increase or decrease the probability of any trade.
