This column was originally published on RealMoney on May 9 at 11:30 a.m. EDT. It's being republished as a bonus for readers.

It's great news that the

S&P 500

and the

Dow Jones Industrials

are trading at new highs, but it's still a stock-picker's market in which choosing the wrong plays can cost you a lot of money. This is especially true in the technology sector, which got left behind in the recent breakout.

Of course, not every tech stock is stuck in the mud these days. Small-caps are doing especially well, with a host of lesser-known issues moving faithfully from one new high to another.

But what about the tech blue-chips? You know the issues I'm talking about, the big guns we traded for big profits just before the bubble burst.

I searched my databases for popular technology stocks with patterns that are more bullish than the mediocre action in the tech indices. Surprisingly, I found many good setups.

Perhaps this unexpected plethora of developing trades signals better days for the entire sector. A good argument can be made that tech and other laggards could play catch-up this spring and join the blue-chips in the lofty heights of multiyear highs.

Many investors have forgotten about


(ORCL) - Get Report

after several years of sideways price movement.

But look what happened on the longer-term chart just a few weeks back: The stock pushed up and through major resistance at a four-year triangle pattern. This is a critical event that should set a sustained uptrend into motion.

The advance stalled out just above $15, but it bounced last week as the selloff neared new support at $14. This reversal could mark the end of the short-term correction.

If so, the current level may be an excellent entry price for a rally that takes out the recent high and re-establishes this stock as an industry leader.

Texas Instruments

(TXN) - Get Report

rallied above two-year resistance at $34 in mid-April, reaching $36.40 before starting to pull back in a bull flag pattern. The stock is sitting on fresh support and should bounce at or near current levels. That would set the stage for a strong move up and over the four-week high.

But don't expect clear sailing in the months ahead. A series of old highs between $36 and $42 could generate whipsaws as it attempts to move higher. For this reason, it's best to keep share size down and allow for wide swings. This defensive strategy should dampen volatility and find its reward once the stock mounts the contested levels.

Agilent Technologies

(A) - Get Report

sold off sharply after rallying to $38 in 2002 and 2004. It returned to this key level for the third time in March, spent a month moving sideways and broke above key resistance. It then stalled out again, this time just below $40, where it's been sitting for three weeks.

This is healthy price action, suggesting the stock will eventually rally above $40. A breakout over this level could mark the start of increased upside momentum for this quiet tech performer. Once a rally is set in motion, look for a rapid advance into the mid-$40s before the stock again drops into consolidation mode.

Network Appliance

(NTAP) - Get Report

rallied to $35 in 2004, dropped into a deep correction and returned to this level earlier this year. Following a two-month consolidation period, the stock broke out to a multiyear high in April. But action since that time has been disappointing, with price swinging back and forth in a series of whipsaws.

However, this pattern still looks quite bullish on the weekly chart. This suggests that the whipsaws will finally die down, allowing price movement to evolve into a steady uptrend that could have considerable legs. The developing rally could easily reach multiyear resistance in the upper $40s before the end of this summer.

Finally, let's look at a chronic underperformer in the tech arena that may be on the comeback trail.


(XLNX) - Get Report

dropped into a persistent decline in early 2004 while the rest of the chip sector enjoyed a major recovery. Although this downtrend remains unbroken, note the falling channel and the stock's current position.

A rally above $30 will break multiyear resistance and start a new uptrend. While the initial move could stall out close to the 2004 high of near $33, it would still mark the beginning of a significant recovery. In fact, this stock has the best reward-to-risk profile of all the issues in this article and could eventually recapture the lion's share of its lost value.

P.S. from Editor-in-Chief, Dave Morrow:

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Alan Farley is a professional trader and author of

The Master Swing Trader

. Farley also runs a Web site called, an online resource for trading education, technical analysis and short-term investment strategies. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Farley appreciates your feedback;

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