With the Nasdaq up more than 12% year-to-date and at 10-year highs, it's decision time for both traders and long-term investors: Should you take the money and run or hold out for even better returns?
Dan Fitzpatrick of Stockmarketmentor.com says the smart money should do a little bit of both, depending on what the tech stock portion of your portfolio contains now. In the attached clip Fitzpatrick runs through three of his favorite ideas, but only after we address the 500-pound gorilla in the sector.
"Apple's (AAPL) a little bit scary" Fitzpatrick says of the controversial name. "A lot of people are saying Apple's over-extended but they're under their desk buying," he adds. It's as good an explanation as any for how a stock both bulls and bears think should pull back, can remain so strong. Bottom line: He says you just cannot short Apple right now, it's a bear trap.
Having gotten that out of the way, let's move on to other tech stocks that Fitzpatrick is watching closely.
Acme Packet (APKT)
Fitzpatrick's favorite short play of last year is starting to look to him like an interesting long idea. After a staggering drop from the mid-$80s to around $25 a share last year Fitzpatrick says both the fundamentals and technicals are improving for this communications equipment company.
Acme "is a name you can step into... lightly," says the bullish and dubious stock picker. "It just can't get much uglier." Sometimes that's good enough.
CenturyLink Inc. (CTL)
Another communications play, CTL is a rarity --a tech name with a REIT-like dividend yielding 7.40%. Normally a yield that high suggests the Street thinks the dividend is in danger. That's one reason Fitzpatrick believes it's a name to trade rather than buy and hold.
"The dividend acts as a floor under the stock," Fitzpatrick says. It's another he'd add on dips rather go all in at once, not waiting to get the dividend pay-off before trimming his position.
The Cisco Kid looks like it's finding its footing after more than a decade of misery. Long-time CEO John Chambers has been trying to reconfigure the company on the fly and at least for the moment, the Street likes how he's doing.
Unlike the late 1990s, there's "nothing bubblicious about Cisco now" says Fitzpatrick. "It just trends higher." Unlike the above trading names, Fitzpatrick calls Cisco a "good core holding," a stock to take home to mom, if you will.
As always, we want to know what you think. Give us a comment in the space below or Tweet me @Jeffmacke. As a third option, tell me and Fitzpatrick in person at the Invest Like a Monster Conference in Newport Beach, CA on March 30 and 31st.