The big name high tech stocks are certainly overpriced. However, a strong summer rally can easily push these issues to new highs. I don't believe that the fundamentals at MSFT, CSCO, and LU are better than they were a month ago. However, these issues keep making new highs. They will correct at certain time. But after a consolidation phase, they are moving up again.
The best way to invest in these stocks is to buy deep in the money calls to protect your gains. I did this with DELL and MSFT in the past and had good results. Although MSFT retreated from 99 to 83 or so, since I bought MSFT May 90 and June 95 calls, I even made some $$ in the retreat.
GTW is almost certain to make new highs before or after they announce reports. I think that they will report good numbers. The new high will be at around 65, and then consolidate.
Same story goes with DELL. Since DELL earning report is still 7 weeks away, momentum players are loading up with Sofite, CSCO, LU and internet issues right now to ride out the earning rally. DELL should hit 100-110 in July. And come mid-August, watch out. It can easily go up to 120-130 before they report.
good luck,
larry! |
