It shouldn't have been too surprising to see the technology sector bounce back from its sharp drop. Investors that have bought on weakness any time in the recent (and not too recent) past have been rewarded. In addition, much of the selling was blamed on weakness in technology stocks in
Japan, not on fundamental concerns in the U.S., and our own
was even able to find a
silver lining in Japan's woes.
TheStreet.com Internet Sector
index, or DOT, was down 16.44 points, or 1.25%, to 1303.87 in recent trading after reaching a low of 1247.84 early on.
TheStreet.com New Tech 30 was not faring as well, down 76.88, or 8.5%, to 829.29, though it has outperformed on the upside of late.
There remained uncertainty about whether today's losses did represent a buying opportunity, or if traders should take advantage of the recovery to book some profits ahead of another downturn. The market faces several important economic numbers this week, including February
on Tuesday, and the
Producer Price Index
Consumer Price Index
on Thursday and Friday, respectively.
Gary Kaltbaum, technical analyst with
, said the bounce back suggested that it was not the end of the technology sector's run, though he wanted to reserve judgement until he saw how the market closed. If the
heads back toward the lows, said Kaltbaum, it could be a signal that technology has topped out. If it finishes unchanged, he said, it was "just another day where they tried to sell it off, but the market couldn't go down."
Kaltbaum was particularly impressed with performance in a couple of Net stocks that slipped early but came roaring back.
, which traded as low as 180 7/8, was recently up 26 3/4, or 14%, to 220. And
, which traded as low as 158 1/2, was recently up 13 1/16, or 7%, to 182 1/4. Kaltbaum said if the market holds up, he would be a buyer, but a careful one.
Bob Dickey, director of research with
Dain Rauscher Wessels
that the DOT was reversing after the early dropoff, and today's low around 1250 was now important support to hold near term. He said it appeared as if the index was "trapped" between that level and Friday's high around 1350, and that a break of either level would be good for another 150 to 200 points in that direction.
"I can't call a top, but I can't say buy, either," he said.