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TECHNOLOGY: What Is Left In The Tank?

International Business Machines (NYSE:IBM), Apple Computer (Nasdaq:AAPL), Google (Nasdaq:GOOG) and most other technology stocks are are leading the markets higher today. This looks to be a run up into earnings as most major technology stocks will be reporting earnings within the next few weeks. As for AAPL they are unveiling a new product called the Tablet and this could be a buy the rumor sell the news type of event into the release of the new product.

The technology heavy NASDAQ has rallied over 80 percent from it's March 2009 lows. There is just one big question to ask. Is this earnings season already priced in? Many tech leaders are near or at new 52 week highs. Even tech bell weathers such as Cisco Systems (Nasdaq:CSCO), Microsoft (Nasdaq:MSFT), and Oracle (Nasdaq:ORCL) are all at new 52 week highs. These particular stocks have a tremendous amount of shares outstanding. The moves that have taken place in 2009 are nothing short of amazing. How much can be left in the tank after this earnings season?

From a chartist's or technical trader's point of view it would seem that a fair share of the move is baked into the current price already. This does not mean that certain stocks won't trade higher. Many will move to new highs. However, most stocks that have already moved higher into their earnings release, may and often pullback after its announcement. This is how most professional technical traders will view the markets during earnings season.

Nicholas Santiago
Chief Market Strategist