Looking for a New Place to Play

If tech is tired, Helene Meisler says, we must search for other sectors where our money may find a home.
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For a variety of reasons, I have not been thrilled with this recent rally. It's been led by a narrow group of stocks, mostly in the technology and biotechnology sectors. I embrace rallies that encompass many groups, which is just one of the reasons I haven't found much to like about this one.

To many readers, I have been too bearish. I have received countless emails asking me why I don't just admit I've been wrong. And I have been wrong on fighting the recent technology rally, because that's where this rally has been concentrated. But it has not been a technology rally which has expanded within its own ranks. Those favorite Internet stocks from April are almost all lower than their spring highs. All this rally has done is relieve their oversold condition. And even


(INTC) - Get Report

, with its bullish comments on the upcoming second half, has not managed to trade above its January high.

Now maybe that sounds petty, but when I heard the folks at


going on and on last Friday about


(MSFT) - Get Report

and its market cap being so huge and

Bill Gates'

surging net worth, complete with all those comparisons they love to make, I was reminded of the Internet stocks in April. How many times did we hear those same comparisons of



market cap with the GDP of Finland or whatever country it was?

This is not a call for selling Microsoft. It is simply a way to gauge when it's time for a stock to take a rest. And Microsoft needs a bit of a rest, along with many other tech stocks.



is one of those techs in need of a rest. I have had a target of 115 on this stock for what seems like forever. Having come so far and reached its target on a news announcement, Hewlett needs to consolidate its gains.

So if tech is tired, we must search for other groups where our money may find a home. And this has been more challenging than one might think. Late last week, I

highlighted the airlines in the transportation sector (and missed the railroads completely). Yesterday, I

highlighted the financials. Unfortunately, better-than-expected earnings at some of the banks did not help the financial stocks much yesterday.

If we take a closer look at the

New York Finance Index

, we can see some similarities to the pattern we found in the

Dow Jones Transportation Average

last week. The trend lines are fairly similar, with one beginning at the October low and connecting the recent May and June lows. We can also draw a flatter line beginning with the little dip down in November. This index is still trading above those trend lines, and that's good news.

In addition, although the financials did not have a stellar day on Monday, they still outperformed the

S&P 500

. You have to squint to see it on the chart, but it's there. In fact, from this chart, you can see how poorly the financial stocks have performed relative to the S&P for the past year. However, there have been short periods of outperformance, and this may be one of them.

American Express

(AXP) - Get Report

remains the best chart in the pile of financial stocks that I watch closely. In addition,

Goldman Sachs

(GS) - Get Report

acts much better in recent days.

Some other positive charts outside the financial group include


(CAT) - Get Report



(DD) - Get Report

in the

Dow Jones Industrial Average

. Cat's earnings didn't exactly wow the Street, yet the stock didn't do its usual collapse into the news. A move across 63 would be quite positive.


(GCI) - Get Report

finally got moving to the upside from its many-month consolidation. (But have you noticed that every time I say something nice about it, it sells off?!) It has a good chart, despite it being a very low-tech company.

Burlington Northern


is slowly working its way higher.

On the negative side of the ledger, I am bothered by



failure to make a new high.

Philip Morris

(MO) - Get Report

should find some support down another buck or so, but it's not a good chart.

United Technologies


acts quite tired up here.

Outside the DJIA,



does not act well. Neither does

J.C. Penney

(JCP) - Get Report

in the retail group.



seems to have run out of steam at resistance in the mid-50s.

In the past few days, a reader pointed out that only a small percentage of the


stocks were technology-related ones, which is why he said the advance/decline line had been so bad. He suggested I take a look at the

Nasdaq 100

, whose A/D line was making new highs. He thought this would make me see how great this rally really is.

Quite frankly, all it did was confirm that it's only a select group of stocks that are acting like this is a bull market. The rest are just muddling through. It's like a bad cocktail party: Everyone's there, but only a select few are having a good time. The rest are caught up in small talk, shuffling from one group to the next. But you stay hoping it may just get better.

New Highs and New Lows

Overbought/Oversold Oscillator

Cumulative Advance/Decline Line

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At time of publication, she was long Hewlett-Packard, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at