Technology shares are spiking higher today, leading the markets. The Nasdaq is higher by 50.34 (+1.90%), trading at 2,694.01, while the S&P 500 and Dow Jones Industrial Average are lagging, up a respectible 1.5%. It appears money flow which had been shunning the technology sector is now rushing back in. Financial stocks are also weaker today after being stronger last week. It appears money is flowing from the bank stocks into the beaten down technology stocks.
It is truly fascinating to watch the charts. For instance, more tech stocks hit master levels of support last week prior to this rally than any other group in the market. This signaled a high probability of money inflow as trading programs and hedge fund players were spotting these levels. Take a look at the chart of Microsoft Corporation (NASDAQ:MSFT). Just last week the stock sold into a key gap fill from October 12th, 2010 and also hit a double bottom from November 29th, 2010. These two coinciding levels and an oversold Microsoft chart, signaled a high probability of a solid bounce. Today, Microsoft is trading at $25.37, +0.57 (+2.30%).
Charts provided by: RealTick LLC
Another stock that has surged in the last few days since the markets made a short term bottom is Hewlett-Packard Company (NYSE:HPQ). Hewlett-Packard was very a oversold chart and last week finally hit two major support levels. This level came into play at a gap fill from September 23rd, 2010 at just above $40.00. In addition, direct your attention to the pivot low made in early October. This also coincided with the $40.00 level. The combination of these two levels made Hewlett-Packard a sweet spot for smart traders. Since that $40.00 level area, HPQ has bounced back, hitting a high today of $42.10.
Charts provided by: RealTick LLC
Gareth Soloway
InTheMoneyStocks.com
