The Old School Tech Portfolio
- Posted by Greg Harmon
- on June 5th, 2013
A couple of weeks back I talked about the Grandpa portfolio, General Mills ($GIS) and Campbell’s Soup ($CPB). This is now in the midst of a pullback and maybe basing, with yields rising. But what if you are not a Grandpa, but the next generation below. Not that tech savy everything on my iPhone, no home phone or cable TV generation. But you have a Yahoo or worse Hotmail email account. Well there is a Old School Technology portfolio for you too. Many of the large technology companies that exploded higher in the tech bubble of 2000 have been clawing back and look like good long term opportunities. Take a look at these 4.
Cicso, $CSCO, has been moving in a channel between 14 and 26.30 for over 10 years, outside of a brief pop in 2007. Now it is moving above the Simple Moving Averages (SMA) and approaching the top of that range with the support of a rising Relative Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that is slowly turning up. Over 26.30 there is resistance at that 2007 high near 32 and then the 67 – 80 area. That get your attention? You can wait for the break out but John Chambers and Co. are willing to pay you 2.8% per year to do it holding the stock.
Intel, $INTC, broke out of a descending triangle in October 2011, tested the high at 27.60 from 2003 and then fell back. It held on a retest of the triangle and is now moving higher again. A break over 27.65 sees the next resistance at 35 and then 55-60 area. It also has support from a rising and bullish RSI and MACD. Again you can wait for the trigger or jump in on this uptrend and collect a 3.7% dividend to wait.
Microsoft, $MSFT, is an even better story. It has cleared the long term channel and has some minor previous resistance at 36 before a shot at 45 and a Measured Move higher to the 65-70 area. It also has a rising and bullish RSI and MACD that support more upside, and a dividend yield of 2.6%.
Finally Oracle, $ORCL, has been steadily rising since 2002. This means it does not have quite the same long term potential that the others have but the set up is worth reviewing. Ready to break above the long term resistance at 35.50. From there the 2000 highs at 45 are the next resistance, still a tidy 25% return.
This is not a day trading or even swing trading basket to own, but for a long term investor. The monthly charts used int he analysis could take a few years to play out. Check in on this group once a month or so.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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