The More Things Change The More They Stay The Same:
As much as we look for young, innovative companies, the fact is the Nasdaq is dominated by “old tech” names. The seven largest names in the index are AMZN MSFT GOOGL AAPL FB INTC and CSCO. A different “old tech” name that reports earnings next week, and just took out former highs made back in the summer of 2000 is XLNX. It sits just 2% off its peak, much better than nearly all technology names. The stock is just below a 95.28 cup base trigger, and if you subscribe to the theory that the big money is made sitting on your hands (I am) one has to deal with an earnings reaction four times a year. It is among the semiconductors too, that have been lagging in the technology arena. Give credit where it is due.
What The HACK Is Wrong?
With cyber security that is. The sub sector within software is not holding its weight compared to some of the better behaved peers. Below is FTNT from our 1/14 Technology Report that we were WRONG about. This week the stock LOST 3.8% as the Nasdaq rose by 2.7%. It is not within the top 10 holdings in HACK, but there has been some dubious moves elsewhere. FEYE fell 2.1% this week also showing weak relative strength. On the brighter side PANW is flirting with the round 200 number, which doubles as its 200 day SMA. One should keep an eye on CYBR as it has trouble CLOSING above the round 80 figure. Since last September it traded above 80 intraday 4 times, with zero finishes over the number.
In the last few weeks I have heard the argument that even though the markets have rallied hard, its overall complexion was little changed. The reason being no new 52 week, or all time highs. That debate is no longer valid as a slew of software leaders have surged to heights they have never seen, even as the Nasdaq remains in correction territory. The relative strength that shows is notable and a good example of this is the chart below of VEEV and how it was presented in our 1/14 Technology Report. It blasted above the very round par number on Tuesday and never looked back. Add to this above the cup base trigger of 109.15.