The NASDAQ Composite index broke above 4,000 on Monday without the help of some highflying tech names. And, Facebook was one of them.
The NASDAQ Composite index broke above 4,000 on Monday but failed to close above that psychological level. That was the first time the index reached that level since September 2000.
However, some of the stocks that you would have expected to be up with the rest of the tech-heavy NASDAQ weren't on Monday. Yelp, Open Table, Pandora, and Facebook were all down sizably.
That doesn't mean investors should stay away from tech at these levels, according to John Stephenson, portfolio manager at First Asset Investment Management.
"I think tech looks really good right here," says Stephenson. "Tech typically peaks two or three quarters after the overall market."
While the benchmark S&P 500 index was down slightly on Monday, it is still near its record highs.
"I consider tech one of the really, truly global industries," says Stephenson. "What you have right now is ongoing strength in every major part of the world – China, Europe, Japan, and, of course, in the US. This has never really happened in the last decade or so that we had this kind of continual strength."
Stephenson finds Facebook to be a tech stock that has strong fundamentals. "This is a company that has margins in the high 50% range," says Stephenson. "Last quarter, they blew away the Street with earnings that were up 60%."
"I would be a buyer and I would be long tech here."
(Watch: Everyone focused on momentum stocks? )
Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, agrees with Stephenson on the overall tech market.
"I wouldn't sell the NASDAQ Composite based upon weakness in highflying Internet and momentum stocks like Tesla," says Ross. "I think the NASDAQ is extremely strong. You want to be a buyer."
Where Ross disagrees with Stephenson is on Facebook.
"This is just textbook technical analysis and it's not necessary a good thing for Facebook," says Ross, looking at the year-to-date chart of the company. The reason is that Facebook has broken below its 50-day moving average and below a neckline support.
So where does Ross see the stock headed next and what levels should you become a buyer? Watch the video above to see Ross' charts and for more of Stephenson's fundamental analysis.
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