Recap of Nov. 10: Time for Tech?

Brenda Buttner was joined by: Gary B. Smith, RealMoney.com columnist; Pat Dorsey, Morningstar.com columnist; Tobin Smith, portfolio manager of ChangeWave Capital Partners; Scott Bleier, chief investment strategist at Prime Charter; and Royce Kanofsky, chief market strategist for Investec Ernst & Company.

Trading Pit:

Technology Stocks.  The Nasdaq went from being 'Can't Miss' for investors to 'Can't Own.'

But the Nasdaq, since its post-attack low on September 21st, has spiked 28 percent in less than two months time.

Most of us may have missed that bottom. Can the market add to these already Big gains?

Royce says if you have the rally and you were fortunate to have some of the stocks that have moved up on this rally, now is not a bad time to sell. Toby couldn't agree more.

Scott says the one thing that we are not expecting is for these tech stocks to go up more.

Gary has been cautious lately.. he says that he would be neutral right now.  If the Nasdaq can break and close above this trendline at 1840 then he'd say the bull rally is still on.  He thinks that there is more risk to be in the market then out.

Pat says you've got to go after the lesser chip names.. they run a lot but they are still reasonably valued. Such as TriQuint Semiconductor (TQNT) or Maxim (MXIM).

Stock X-Change

Tobin, Scott, and Royce all stayed to debate what to do with Microsoft (MSFT), Intel (INTC), and Cisco (CSCO).  All three stocks are up huge from their post attack lows.

Lately things have been looking good for Microsoft.  The anti-trust cloud is lifting and since its September low, it's up 31%.  Tobin says he wouldn't buy it  he doesn't think Microsoft is going to grow over the next 2-3 years. If you want to buy a stock that you are very comfortable that could go no lower than 55 dollars  and no higher than $75  $80, buy Microsoft.  If you are a growth investor he says he wouldn't mess with it.

Ten days after the terrorist attacks, Intel bottomed out at about $19.  But since that bottom it has added 44% to its stock price.  Scott says buy it and put it away .. it's the dominant player.

And the dethroned king of tech, Cisco, hit a post attack low of $11 and change.  However since that time it has risen 71%.  Royce says it's a great company, great management, his company owns it and says we should all sell it!

Chartman

The rivalry finally resumed!  After being away for three weeks, Pat returned to take on Gary and his charts. 

Energy stocks were up last year, when most of the market was down.  But even before the war on terror began, fuel prices along with energy stocks were falling.  So Gary and Pat each picked an energy stock that is low enough to be at an attractive price.

Gary B. chose Schlumberger (SLB).  Even though he normally likes to buy a stock on strength, if he does buy a stock on weakness, he buys it near support.  In technician or charting terms, SLB has made a beautiful double-bottom near $40, so Gary B thinks now is the time to load up on the stock. Pat disagreed with the Chartman because SLB's diverse assets do not complement each other, its non-oil related parts are stagnant, and the stock is 20% overpriced.

Using his fundamental analysis, Pat chose Duke Energy (DUK).  He likes this company because its diverse assets DO complement each other, its wholesale energy business is growing fast, and the stock has a 15% upside and a 3% dividend.  The Chartman did not like Pat's pick because its future on the chart is cloudy.  He thinks that the company could break either up or down, and is just too iffy to tackle right now.

Predictions

Gary B: Dynegy (DYN) gains from Enron's (ENE) fall

Scott: Gateway (GTW) doubles within 12 months

Pat: Wireless mergers ahead; Western Wireless (WWCA) & Triton (TPC) targets

Tobin: Santa beats Usama; Tiffany (TIF) up 20% by Jan.

Royce: Telecoms merge; WorldCom (WCOM) bought