Facebook officially goes public in the primary market this evening and opens for its first day of regular trading on the Nasdaq tomorrow morning. That means that all of the retail investors clamoring to buy shares of the social network will get their chance tomorrow. But for everyone else, it means that stocks are going to get "sympathetic" to Facebook's attention.
Stocks make "sympathy moves" whenever there's a lot of action in a high-profile name. It's the reason why all the airlines move higher when Delta (DAL) announces good earnings. It's also the reason why big banks tend to drop as a group when a new drama emerges around Bank of America (BAC). There are a couple of reasons for sympathy moves: one is that seeing Mr. Market's reaction to a big valuation change has implications for peer companies, and another major one is driven by flow of funds.While we don't yet know how investors are going to react to Facebook's introduction to the secondary market tomorrow, it's incredibly likely that early FB trading will introduce extra volatility into stocks, and tech names in particular. To take advantage of the volatility hike, let's take a technical look at some of the biggest technology sector names on Wall Street. If you're new to technical analysis, here's the executive summary: Technicals are a study of the market itself. Since the market is ultimately the only mechanism that determines a stock's price, technical analysis is a valuable tool even in the roughest of trading conditions. Technical charts are used every day by proprietary trading floors, Wall Street's biggest financial firms, and individual investors to get an edge on the market. And research shows that skilled technical traders can bank gains as much as 90% of the time. >>5 Tech Stocks to Buy Instead of Facebook Every week, we take an in-depth look at large-cap stocks that are telling important technical stories. Here's this week's look at the technicals of five must-see stocks.