The Seasonal Tech Trade Is Back

 | Dec 02, 2011 | 11:21 AM EST
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The floodwaters recede, and tech springs to life. That's what it looks like when we realize that the "seasonal" trade, the annual move up in tech stocks, was clearly stunted by all the capacity that was taken out by Thailand.

Remarkably, now that it is coming back on, we are seeing supply constraints that are allowing the drive makers to get some gross margins. At the same time, people are getting excited about a return in spending from China, a very big deal, one that makes for good chatter from Intel (INTC), SanDisk (SNDK) and one of my favorites, Nvidia (NVDA).

You combine that with the possibility of strong sales from Apple (AAPL), as we heard yesterday from JPMorgan, a new delivery service from Google (GOOG) and terrific chatter from Amazon (AMZN) for the holiday season, and you can see how the tech seasonal trade has gotten back in line the way that the Thai facilities are coming back on line.

Action Alerts PLUS owns two beaten-down tech names, Broadcom (BRCM) and EMC (EMC), which may be ready to roll because cell-phones and big data are big themes. But the hottest stock of all is Google, which my friend John Roque, a terrific technician, is saying could be in total breakout mode.

Yesterday we saw the first tech leadership. Now we are seeing the soldiers follow. It's about time.

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