Remember that time when tech stocks took it on the chin following Donald Trump’s election? Well, it’s all history, baby. That little knee-jerk reaction has now been dutifully corrected.
The stock rally greeting investors in 2017 was a boon for tech stocks. With Friday’s high-volume pop the Nasdaq-100 and its accompanying ETF — the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) — surged to yet another all-time high.
And you know that that means.
Every QQQ shareholder on the planet is now sitting on a winning position. And anyone unfortunate enough to still be betting against the Nasdaq-100 through shorting the fund is once again in a world of hurt. More hurt, in fact, than they’ve previously experienced. With QQQ bulls incentivized to sit tight and bears squealing in pain, the situation is ripe for more upside.
Fortunately, the past few weeks of choppy chop have created bases in tech stocks across the land. And these bases are now being broken to the upside, which offers some attractive low-risk bullish setups.
After scouring the sector, these are three of the best opportunities among tech stocks.
3 Tech Stocks on the Move: Apple (AAPL)
The price chart of Apple Inc. (NASDAQ:AAPL) is a thing of beauty.
After biting the dust following earnings last October, it has made a resounding comeback. Its round trip has taken on the form of a classic cup-and-handle pattern which is on the cusp of completion.
Keep an eye on the $118-$119 resistance level this week. A break above that could kick off a renewed advance in the king of tech stocks.
With earnings looming on Jan. 31, the conditions are ripe for a run into the number. Consider grabbing the March $115 calls for around $5.50 to profit.
3 Tech Stocks on the Move: International Business Machines (IBM)
International Business Machines Corp. (NYSE:IBM) remains a far cry from its 52-week high. But it’s taking advantage of the market’s bullish undertones by reclaiming much of its lost ground. Last year’s recovery was sufficient in turning all of its major moving averages higher. And now IBM stock sits just shy of a new 52-week high.
IBM spent much of the holiday season in digestion mode. And that’s a good thing. The sideways churn carrying the tech stock into the new year has provided a nice little base to launch from right here and right now.
Watch for a pop above $170 in the week ahead, then grab Mar $170 calls for around $5.
Be aware, IBM does report earnings on Jan. 19, so if you’re not willing to roll the dice into the binary event, then exit beforehand.
3 Tech Stocks on the Move: Facebook (FB)
The king of social media rounds out today’s trio. Facebook Inc (NASDAQ:FB) shares have struggled since disappointing the street during its last earnings announcement. November’s down-gap has continued to hamper the stock through the holidays.
On Friday, however, the bulls finally fought back.
The pop was pretty, no doubt about it. The volume was heavy, revealing mass participation, and FB succeeded in vaulting back above its 50-day moving average. If buyers can press their advantage, the earnings gap should fill over the coming days. That means $127.40 is a realistic short-term target.
Grab the Mar $125 calls for $4.90 to capitalize on the next advance.
As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities.