By: John Kosar of Street Authority
All major U.S. stock indices finished in positive territory for the fourth consecutive week, led by the tech-heavy Nasdaq 100, which gained 1.6% and is now up 17.6% for the year. This index has been a major focus of mine since the Aug. 25 Market Outlook. Its move above major overhead resistance at 4,147 this month was an important catalyst for the recent strength in the broader market.
On a sector basis, technology, consumer discretionary and materials led. Utilities, energy and financials trailed the pack and finished the week in negative territory.
Cisco Systems Resuming 2011 Uptrend?
The recent strength and leadership shown by the technology sector resulted in a potential buying opportunity in Cisco Systems (NASDAQ: CSCO). I discussed the topic Wednesday on CNBC, just before the tech bellwether announced its fiscal first-quarter earnings.
CSCO, which is the 10th largest constituent stock comprising 3.3% of the technology sector index, broke out to the upside on Friday from 15 months of sideways action that indicated investor indecision.
This breakout indicates that CSCO's larger August 2011 advance has resumed and targets a move to $32, 22% above Friday's close. This will remain valid as long as the upper boundary of the indecision area at $25.90 loosely contains prices on the downside as underlying support. Continue reading "In The Week Ahead: This Stock's Breakout Signals More Gains Ahead in 2014"