A rally in technology and telecommunications stocks seems to be far from over.

Research in Motion ( RIMM) jumped because of better-than-expected results from the BlackBerry maker and indications that revenue and profit growth are likely to continue. Tech investors also focused on IBM ( IBM) and Sun Microsystems ( JAVA), as the two firms huddled in what was described as late-stage merger talks. Speculation was that IBM would end up paying $9.55 a share for Sun, about a dollar less than originally expected.

Of the major Dow Jones industry indexes, the telecom index rose the most, by 2.9%, in the five sessions ended April 2, and the technology index was second-best, up 1.8%.

The 10 best-performing tech/telecom funds, summarized in an adjoining table, posted gains of as much as 8% for the week. Although price volatility and longer-term performance earned them marks equating to "hold" (for grades in the "C" range) and "sell" (marks in the "D" and "E" ranges) recommendations from TheStreet.com Ratings, they have shown resistance during recent market declines and have performed on the forefront of funds during rallies.

If the March rally ultimately turns into a sustained bull market, tech/telecom has plenty of room for growth.

For example, the iShares S&P North American Technology Multimedia Networking Index ( IGN), Wisdom Tree International Technology ( DGT) and Rydex Series Telecomm ( RYTLX) are down by 34% to 36% over the past year. So if an emerging bull market were to carry them back to levels of a year ago, each would advance more than 50%. By that same logic, the PowerShares DWA Emerging Market Technical Leaders Portfolio ( PIE), would enrich its holders by 133%.

The perils of "inverse" and, even worse, "leveraged inverse" funds can be found in the nearby table of the worst tech/telecom fund performers. Of only four tech/telecom funds to suffer setbacks for the week, the worst three are inverse-leveraged ETFs that move opposite the market at geared ratios.

Best-Performing Tech/Telecom Funds for the Week
Fund Ticker Rating Fund Type 1-Week Total Return (%)
ProShares Ult Telecommunications LTL U ETF 8.09
iShares S&P NA TechMultimediaNwkIdx IGN D+ ETF 5.28
WisdomTree International Technology DBT C- ETF 5.01
Rydex Series-Telecomm A RYTLX C- Open-End 4.80
Rydex 2x S&P Select Sctr Tech ETF RTG U ETF 4.67
SPDR SP Intl Tech Sector ETF IPK U ETF 4.63
PowerShares DWA Emg Mkts Tech Lead PIE E+ ETF 4.50
SPDR SP Intl Telecom Sect ETF IST U ETF 4.38
Fidelity Adv Commu Equipment A FDMAX E+ Open-End 4.20
Fidelity Select Wireless Fund FWRLX C+ Open-End 4.14
Source: TheStreet.com Ratings & Bloomberg (Data as of 4/2/2009).
For an explanation of our ratings, click here..

Worst-Performing Tech/Telecom Funds for the Week
Ended April 2
Fund Ticker Rating Fund Type 1-Week Total Return (%)
ProShares Ult Sht Telecommunication TLL U ETF -9.69
Direxion Technology Bear 3X Shares TYP U ETF -7.33
ProShares Ultra Short Technology REW C ETF -3.92
iShares S&P NA Tech Semicon Idx IGW D+ ETF -0.05
E*TRADE Technology Index Fund ETTIX C+ Open-End 0.00
AFBA 5Star Science & Tech A AFATX C+ Open-End 0.00
Buffalo Science & Technology Fund BUFTX C+ Open-End 0.11
Emerging Market Telecom Fund ETF C+ Closed-End 0.16
HOLDRS TeleBras TBH D ETF 0.20
USAA Science & Technology Fund USSCX C Open-End 0.26
Source: TheStreet.com Ratings & Bloomberg (Data as of 4/2/2009).
For an explanation of our ratings, click here..
Richard Widows is a senior financial analyst for TheStreet.com Ratings. Prior to joining TheStreet.com, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.