Market corrections are typically traumatic, wrenching events that scare traders, especially fast-money traders, out of the leadership stocks as they head for cover fleeing falling indices. One of the aftereffects of these corrective events is that we often see a change in leadership. Traders don't switch horses until the momentum is broken and corrections do just that, shaking investors out of prior leadership and freeing up liquidity for new leadership. We believe this is happening right now. It looks like the leadership provided by the commodity-related stocks, especially the metals, is giving way to a renewed interest in the technology sector.

The commodity-related stocks took the hardest hit during this correction. If we exclude energy stocks, the sector took a significantly harder hit, as metal stocks buckled under relentless hedge fund selling. The bullish long-term theme behind this sector seems to be intact, but the excesses created in this group over the last year need to be worked off. It seems likely that these stocks will have to go through an intermediate-term consolidation. This opens the door for the technology sector to move into a leadership position.

Technology stocks have been improving steadily all year, and we are seeing significant technical improvement in the group. Several large-cap tech names have broken out of long-term bases and are establishing new primary uptrends after spending several years in the basement following the 2001 "tech wreck." If the group can find a bullish catalyst or theme that investors can latch onto, then it is well positioned to take a leadership role over the coming months.

The most interesting name in the sector is

Cisco Systems

(CSCO) - Get Cisco Systems, Inc. Report

. After Monday's earnings announcement, the stock rallied $2 and boosted the entire tech sector. CSCO is the bellwether name in the group, and the bullish earnings report from the company bodes well for the entire sector.

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CSCO is emerging from a long-term bullish rectangle base formation to the upside, which signals a primary bullish change in the name. The stock has also formed a bullish cup-and-handle pattern in the daily timeframe. This continuation pattern suggests the stock is ready to trend higher in the short-term as well. Traders should buy CSCO here and look for a new primary uptrend to develop in the coming months.

Nvidia Corp.

(NVDA) - Get NVIDIA Corporation Report

is another attractive stock in the technology sector. NVDA makes the graphic-processing chips used by to run video games. The stock has rallied sharply since March, and NVDA has shown impressive relative strength vs. the broader market during this corrective period.

The long-term chart shows that the stock continues to push higher within the uptrend channel in the daily and weekly timeframes. The stock has pulled back from the highs recently, but this looks like a bullish consolidation in the uptrend. Traders should look for NVDA to turn back up soon and resume the primary uptrend in the coming weeks.

At the time of publication, John Hughes and Scott Maragioglio were long Cisco. Hughes and Maragioglio co-founded Epiphany Equity Research, which has developed and utilizes proprietary tools to identify and track liquidity changes in the market indices and sectors. Hughes advises numerous asset managers, hedge funds and institutions managing in excess of $30 billion. Maragioglio is a member of the market technicians association (MTA) as well as The American Association of Professional Technical Analysts (AAPTA) and holds a Chartered Market Technician (CMT) designation. Maragioglio has also served on the board of directors of the AAPTA.