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Tech Is Down, But Not Out


It would not be surprising to see Tech buying return near the end of the day and over the next few days.

Tech stocks are still lagging today. How much fire power have the bears used to attack the Naz? I suspect the bears have used up a massive amount of fire power the last two days to give some "star" names in the NAZ the woodshed treatment.

I would not be surprised to see Tech buying return near the end of the day and over the next few days. Chips have been the most attacked group of stocks in the tech and frankly, I think that is where the most value is within the group. Either that, or many stocks in the medical tech space are extremely cheap as well.

Even names I don't like as much in the semi-space look like good values here (Qualcomm (QCOM) and Intel (INTC) come to mind, among others). After wringing my hands for the last two days on Broadcom (BRCM) I finally decided to jump in and add to the name, even though I can't be sure it's found a firm bottom in the short term. At this level I'm willing to risk being early as I do not want to miss a move if the Verizon (VZ) royalty revenues are reported earlier than expected and the stock spikes higher. Again, I feel this stock is still cheap on a fundamental basis at $40.

I have also added PMC-Sierra (PMCS), a stock that spiked on a very good quarter. The company has pulled back about 10% off recent highs and I think this is a break-out chip name that will go much higher.

Lastly, in the ultra cheap finance stock front. Discover Financial Services (DFS) has gotten killed with the rest of the finance space. This selling is unjustified and I feel that DFS's superior financial strength and higher quality of customers will serve them very well. The stock is severely undervalued at current prices.

I am not out of Apple (AAPL). This follows my Google (GOOG) sale in recent days. Both stocks were huge winners for me and I still believe they can move higher. However, the relative opportunity hidden in the depressed valuations of many semi names as well as quality smaller/mid cap growth stocks that the market has been punishing of late.
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Position in BRCM, PMCS, DFS

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