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Technology Lifted It Higher. Will It Lead It Lower?

|Includes: Apple Inc. (AAPL), AMD, GOOG, MRVL

Since the March 2009 lows its clear to see that technology has been the leader. The NASDAQ composite traded down as low as 1265.52 on March 9th, 2009, and has just made a recent 52 week high at 2322.51 on January 11th, 2010. This is a 1057 point advance, or 83 percent increase from the March low in just 10 short months. This is considered a parabolic move especially for an index.

While market leaders such as Apple Computer (NASDAQ:AAPL), Amazon (NYSE:AMZN), and Google (NASDAQ:GOOG) seem to get all the positive press there have been many other huge tech winners. Stocks such as Advanced Micro Devices (NYSE:AMD) traded as low as $1.62 in November 2008. AMD just hit a recent high of $8.89 a couple of days ago. Marvell Technology Group (NASDAQ:MRVL) was trading as low as $4.48 in November 2008, today it hit a new high at $20.79. AMD and MRVL are not alone. There are many other major winners in the tech arena with simply staggering percentage gains.

What does technology have left in the tank for 2010? Generally after such huge percentage gains most stocks need to correct or pullback. Just like a person that runs up a hill or mountain side, they would need to rest for a while before running higher. When it comes to stocks they need to pause or pullback before pushing higher. This is normal and healthy action when it occurs.

2010 is going to be an interesting year for technology. This index is obviously due for a correction or pullback within the next few months. This would be healthy action if it would take place. Many talking heads in the media continue to like and recommend major tech stocks up here at these levels. After a year when an index has traded higher by more than 80% one must expect a pullback or correction. 2009 has been a historic rally; therefore, don't expect the same for 2010.