VMware (VMW) — This subsidiary of EMC Corp. (EMC) is a leading supplier of virtualization software. According to S&P, it is well positioned to leverage its dominance in the server virtualization market and should benefit from an economic uptick in emerging markets. VMW had operating earnings of $2.45 per share in 2013, and S&P estimates earnings of $4.10 in 2014 and $4.85 in 2015.
The stock bottomed in June and broke a downtrend with a dramatic breakaway gap in July. Since then, it has traded in a bull channel with a 10-to-15-point range from support to resistance.
Recently, the stock attracted heavy buying. Because it is close to the top of its trading channel, try to buy it on a pullback to its 50-day moving average at $95. The trading target for VMW is $115, but long-term investors could reap a much higher reward.