Old Tech Names Cisco, Intel, Microsoft Help Lead Dow 30, IBM Drags

NEW YORK (TheStreet) -- Many investors are not aware that three old-time tech stocks are among the leaders of the Dow Jones Industrial Average. The Dow 30 is up 8% year to date pulled higher by the return to momentum status of Cisco Systems (CSCO) up 24%, Intel (INTC) up 44% and Microsoft (MSFT) up 33%. The fourth old tech stock in the Dow 30, IBM (IBM) is the biggest loser down 13%.

What's interesting is that Cisco is 66% below its all-time intraday high at $82.00 set in March 2000 with Intel 51% below its all-time intraday high at $75.81 set in Sept. 2000 and Microsoft 17% below its all-time intraday high at $59.97 set in December 1999. IBM on the other hand is 18% above its tech bubble peak of $139.18 set in September 1999.

Here's how to trade these stocks going into year end 2014.

Cisco ($27.77) has been on a momentum run-up of 24% since trading as low as $22.49 on Oct. 15 and setting a multiyear intraday high at $27.98 on Thursday. The stock crossed above its 200-day simple moving average at $23.80 on Oct.28. The weekly chart profile is positive but overbought with its key weekly moving average at $26.16.

Investors looking to buy Cisco should enter a "good 'til canceled" limit order to buy weakness to a key technical level at $22.15. Investors looking to book profits should enter a "good 'til canceled" limit order to sell strength to $29.85, which is 7.5% above Thursday's close.

IBM ($164.05) set an all-time intraday high at $215.90 in mid-May 2013 and traded as low as $159.80 on Nov. 20, a bear market of 26%. IBM has been below its 200-day SMA at $187.65 on Oct. 9. The weekly chart is negative but oversold with its key weekly moving average at $168.12 and its 200-week SMA at $187.20.

Investors looking to buy IBM should use a buy-stop above the key weekly moving average at $168.12. Investors looking to sell IBM should enter a "good 'til canceled" limit order to sell strength to key technical levels at $167.40 and $178.20.

Intel ($37.46) began its 2014 momentum run-up from its 200-day SMA when it was $23.97 on Feb.7 and traded to a multiyear intraday high at $37.89 on Dec. 3, a bull market rally of 58%. The weekly chart is positive with its key weekly moving average at $35.16.

Investors looking to buy Intel should enter a "good 'til canceled" limit order to buy weakness to key technical levels at $31.05 and $29.75. Investors looking to book profits should enter a "good 'til canceled" limit order to sell strength to another key technical level at $39.75, or on a sell-stop below the key weekly moving average at $35.18 which will be rising each week.

Microsoft ($49.84) began its momentum run-up from its 200-day SMA when it was $28.69 on April 18, 2013. The stock continues to trade above its 200-day SMA and this average is now at $43.02. Microsoft traded to a multiyear year intraday high at $50.05 for a bull market run-up of 74%. The weekly chart is positive but overbought with its key weekly moving average at $47.55.

Investors looking to buy Microsoft should enter a "good 'til canceled" limit order to buy weakness to a key technical level at $41.65. Investors looking to book profits should do so on a sell-stop below its key weekly moving average at $47.55 which will be rising each week.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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TheStreet Ratings team rates CISCO SYSTEMS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CISCO SYSTEMS INC (CSCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, attractive valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: CSCO Ratings Report

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