5 Tech Stocks I’m Looking To Trade

Market action reflected the inclination to take profits
in stocks that have ramped up. The semiconductor sector took a rather
broad hit. Most of those stocks took it on the chin and are coming into buying
range. I will get into a couple of leaders within the group in a minute. It also
pays to have short positions in place when the market turns south. Stocks that
are vulnerable to a decline or are already in decline will typically fade
faster. So it pays to pay attention to the instruments that are in an advancing
stage as well as those that are either in a plateau or have already begun the
decline. The stocks that are in an upward trend bounce back easier. That is the
gist of it. Those that are weakening just flat out don’t have what it takes to
rise to the occasion. Depressed stocks ought to be shorted. So let’s get into a
couple of good longs and shorts.

Network Appliance
(
NTAP |
Quote |
Chart |
News |
PowerRating) 25.50

I shorted more of this stock yesterday into a bounce. It bounced yesterday
morning; and I shorted more because the stock is currently in decline and the
time to short a stock that is in decline is in a rally. So that is what happened
yesterday. I added to the short position carried. The stock will drop today
after pre-announcing a lousy quarter. Why is that surprising? Look at the action
in the stock over the last 50 and 200 days. The stock trades like dog meat.
Examine the chart and see for yourself. So I am short this stinker. It’s down
23% this year and heading lower. NTAP is actually up 43.5% in the last year. Do
you really think those that are up over the last year are inclined to give back
more of the gain made? The odds favor further selling pressure that will cause
the stock to drift to lower price points. This stock is in full-blown stage 4
misery. So exploit it and sell it short. I would just stick in a toe so that you
could watch it and then short it up. That means sell it short in a rally. It
takes guts to do that. Moving averages are utilized to manage the risk. It
always pays to pay attention to any position you carry. Neglect will harm you
the majority of the time. Sometimes luck is on your side. NTAP gave long-term
investors reason to hope with the advance made last year. It could shine again,
but first the decline must be completed and a base built and that takes time. So
if you are long at least sell it. Just examine the chart and view the evidence
sitting right in front of you. Sell the stock short on a bounce to the 26 zones.
Use 29.20 to stop the loss. Adjust that stop as the moving averages drop. No
forgiveness. Not in the stock market. No compassion. Movement. It’s just a one
reaction after another that stirs the emotion of the players. Investors are
fearful of losing the gains made last year in this issue and are selling. Bad
news confirms their fears. So more selling occurs. Right now at this point in
time it pays to be short NTAP

Gilead Sciences
(
GILD |
Quote |
Chart |
News |
PowerRating) 44.22

GILD is coming into buying range right now after pulling back from the highs
made recently. The high (47.99) was made on July 20th. The stock has faded in
orderly fashion. It is a bullish stock in a bullish group and the chart says
that higher price levels are in the cards for GILD, so I would buy the stock
right now and buy more of it crossing 48. If the stock crosses 48 on a closing
basis then the signal to buy will add to the power this leader benefits from.
The power comes form a commitment from investors that keep buying the shares.
GILD is in a powerful advance right now. The pullback provides a buying chance.
Check the chart out. The stock has good fundamentals. It is rock solid
fundamentally; and when you marry that to the technical strength then you have a
good chance to gain. GILD is up over 26% this year with most of the gain coming
this year. In fact on a 52-week basis NTAP has delivered a better return. Check
the charts of both and see the positive possibilities. The odds are favorable
that GILD sustains its advance and moves to higher price zones. So buy the
stock. Buy it harder above 48. Place the stop at 42.99 for traders and 37.01 for
investors.

Mr. Rothstein also writes Wealthcast, a monthly newsletter about the technical
behavior of the markets. He has been quoted on Bloomberg, CNNFn, the Dick Davis
Digest and the Dow Jones Newswire. Since 1993, Mr. Rothstein also hosted
WealthCast, a radio show in the Washington DC area covering the stock market.