Apple once was the largest component in the Nasdaq, now it is third behind AMZN and MSFT, but it still commands respect. If there is a proxy for the Nasdaq, it is AAPL. Especially after its recent run back above 200, a number that gave it plenty of trouble (Mondays CLOSE above was the first in nearly 2 months as 6 sessions between 6/18-27 was above intraday but unable to finish north of it). A healthy AAPL should be viewed as a “risk on” feeling for not only technology, but the overall markets. It is the second largest name in the S&P 500, and it is one of just 6 names in the DOW over 200, and keep in mind that is a price weighted benchmark. The stock still trades 13% off most recent 52 week highs, and if it should hit all time highs sometime this year, put on your seat belts.
Software Acting Anything But:
Our readers know we like to keep a check on the two most important groups within technology. Semiconductors seem to be making frequent pushes, but they are having a tough time knocking off the perennial leader software. Over the last one year period the IGV holds a commanding lead higher by 21%, tripling that of the SMH up 7%. On a much shorter time frame the IGV was a powerful outperformer rising 3.1% this week compared to the SMH eking out a .6% advance. Do not count out the SMH yet, as it has the look of a handle developing on its current cup base. But on an individual stock basis software has an abundance of leaders, and look for the group to continue to make their presence felt.
New highs tend to beget more new highs. Things in motion then to stay that way, whichever the prevailing direction is up or down. Add to that a name that is within a strong group and your odds of success become more pronounced. Below is the chart of CDW and how it appeared in our 7/1 Technology Report. This name is on a current 7 week winning streak and is now a couple of handles above the suggested entry. This holiday shortened week it rose 2.5%, after the prior two rose a combined 6.4% in energetic trade. Look for higher prices going forward.