Tech Stocks Continue Rally 

Sector Not Over-valued!

by Ian Harvey

July 10, 2017


Technology stocks have been having a tough time of it in the past few weeks, despite the fact that many of them are sound, providing excellent earnings results with incredible profitability and are providers of the future direction.

Even though tech stocks are, in the main, consistent out-performers, many hedge fund managers, investors and money managers see the tech sector as being over-valued and too expensive – alluding to a much ill-perceived idea that it resembles the 2000 bubble.

Many of the major tech names have suffered such as Microsoft, Apple, Facebook, Micron Technology, but Friday saw resurgence with the tech-laden Nasdaq Composite (COMP) moving higher, up 1.1% on the day.

Looking at some of the back-facts, internet stocks have historically outperformed in the third quarter - the First Trust Dow Jones Internet Index Fund (FDN) -- a fund that includes many FAANG stocks among its top holdings -- has averaged a third-quarter gain of 5.34% over the past 10 years, with 70% of the returns being positive.

Innovation of new technologies has accelerated at an enormous rate over the past few years; data shows that the tech sector is the foremost leader in 2017.

There are many factors that show that there will be further exceptional upside in the near future…..

  • Demand for tech-related products and services have never been greater in the industrial field – providing better productivity, safety and co-operation.
  • The Internet of Things (IoT) is opening more doors for businesses.
  • Continued growth of tech ideas – such as cell phones, smart watches, virtual reality and smart home devices -- are becoming a must in society.
  • Research has moved into previously unimaginable territory -- companies are developing technology to not only map out the human genome, but to edit it, computers and machines are now being built with ability to learn independently – the IBM's Watson – and many more -- and is not going to stop any time soon.
  • It is unlikely that earnings will dissipate – quite the opposite in fact – expect an upsurge.
  • Multiple-revenue-stream strategies look to be part of the future.
  • Artificial intelligence could make for another untapped growth category.
  • Massive savings from the cloud in comparison to the past of on-premises software or hardware is certainly the way of the future.
  • Ideas from engineers' imaginations to the computer screen to the real world will be seen as an outstanding advancement.

Just looking at the way the internet has blossomed five-fold in the past five years – and is likely to double in the next two years. This has led to many data centers making huge investments to upgrade their infrastructure to keep pace.

In Conclusion

The tech field definitely looks vastly different now than it did at the turn of the century – with many of the companies out-performing and producing increasingly profitable earnings with positive future forecasts.

Therefore, it would be extremely detrimental to your trading portfolio to dismiss the strength in tech stocks as there are obviously plenty of genuine underpinnings in the strength of the underlying companies; which will certainly provide an opportunity to profit not only in the long-term, but the short-term as well; whether you are buying the stock or executing options.

So, if you've hesitated at all to invest in tech stocks, you're missing out on some of the biggest gains in the market today, as the recent weakness in this space has created even more compelling opportunities to buy.

If you are having difficulties in determining how to play this field of profitability, maybe it is time to jump on-board with the members of Stock Options Made Easy.

Our proven track record says it all!!

Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


”Success is simple. Do what's right, the right way, at the right time.”

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Options traders win because they are successful.

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