Three Stocks Come Back to Life

 | Jan 20, 2012 | 11:29 AM EST
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Sure, this market should be going down already. Sure, this year has become too good to be true. You can sell now and take it all to the bank and they won't mind that you made it because you played the first few weeks of January.

Still Greek uncertainty. Google's (GOOG) hammering. Downbeat commentary about Europe across the board. We should be in a tailspin.

But the Dow says "no" to the tailspin and it says it each day with a different group, whether it be telecom or health care or industrials. Today it said "no" to a big selloff with three old-line tech companies that are still so cheap on earnings that we heard last night that you can see why people will still buy them.

All three tell different stories. Intel (INTC) actually did have killer gross margins and did make up some ground at the end of the quarter. People are becoming believers in the future and it isn't just because of hype, it is also because of the big boost in capital expenditures for new form factors. A new cycle could be at hand and maybe several. It can go higher, especially with a boost in the already-bountiful dividend and some big cellphone chip orders that might be coming their way. 

Microsoft (MSFT) is becoming the stealth opponent of Apple (AAPL) using Xbox to become a preferred hardware player. I am having a hard time getting my arms around this even as the kids love Xbox and love to stream on it. But I like generational ignorance. It means the appropriate demo knows more than I do. You get Skype integrated into actual TV watching, badmouthing American Idol participants to your friends while watching the show and suddenly Microsoft actually has pizzazz. I don't want to get too far ahead of myself here, because Microsoft is a personal-computer-based company and I think we all see the writing on the wall on that one even as it seems like a huge wall with small writing right now. But to me, it's terrific to hear about another business line that has come on strong in a different way than just gaming. Ballmer keeps his job, the stock goes higher.

IBM (IBM)? What can I say? It's a delivery machine. They are so far ahead of targets and it isn't all stock buybacks, although that buyback is now up there with Autozone (AZO) as one that is moving the needle. I continue to be impressed with how aggressive IBM is in consulting and how consistent it is. Oddly, what I think caused the stock to skyrocket today was only part earnings. The rest might have been the chart that was signaling one of the more classic head-and-shoulders patterns I have come across of late and I know many traders who thought that Europe had to be bringing them down. Nada. The stock goes higher.

Three stocks left for dead, two repeatedly in Microsoft and Intel, and one for many years, IBM. All back to life, and not as Walking Dead but sprinting winners. They all go higher.

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