Thread: John Murphy this week's Barrons. Bullish for techs.
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Tech Stocks Come on Strong
Technology stocks were among the hardest hit during the second half of 1997, and Nasdaq's mid-January rebound came just as that technology-dominated index was retesting its October low near 1470. On January 28, the Nasdaq topped its January 5th peak of 1600 and completed the bottom that began two weeks earlier. New highs by Cisco Systems, Dell Computer and Microsoft, combined with upside breakouts in Intel and Sun Microsystems, were the driving forces behind the big-cap tech rally. During the first week of February, the Nasdaq continued to rally above its December peak, and a retest of its October high near 1750 appears likely.
After bottoming out for most of 1997, another technology stock, Unisys (UIS), looks like it's ready for a major upward move. This week's rally above 17 pushed the stock's price to an eight-year high, and it looks ready for a major breakout . The next upside target is 24, with a longer-range goal of 40.
As stocks break through their six-month trading ranges on the upside, we expect the Dow to retest its old high near 8300. Bonds and the dollar will probably continue to consolidate. Technology stocks are showing new market leadership and should push the Nasdaq near its old high as well.
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John Murphy is the author of several books on technical analysis -- most recently The Visual Investor -- and is president of MURPHYMORRIS, Inc., a new company dedicated to educating investors.
Murphy's Web page can be found at murphymorris.com
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Victor
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