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» Ask and answer questions about technical support and product selection and have a chance to earn points for each answer you provide.After discounting retail sector, earnings momentum picks up in tech

Jan 16, 2017

Techs rallied hard at the end of 2016, but momentum has slowed this year and the broader market has missed out on gains.

Tech stocks have recovered nicely from steep losses at the end of 2016, with both leading S&P technology sector index funds returning to growth territory. But momentum picked up in the final quarter of 2016 and has slowed somewhat in 2017.

Although it has attracted attention lately, this period of strength doesn’t compare with the market rally during the market boom of 2000-2002, said Ken Najarian, director of ETF and mutual fund research at USITC. The tech sector regained its strength later in that decade, and its return was to the tune of 31% for the three years from 2002 to 2004.

“I’d love to say tech is back to its rightful place,” he said. “I’d love to put a flashlight to its head and blow its brains out. It’s not. It’s still in the over-performing phase of its life.”

The market had a nice run for a year, and there is talk of a (long-term) reversion to the mean, Najarian said. The market may not be breaking out to new highs, but it is bouncing around and not breaking out very much. “As long as you’re not screaming, the market is good.”

Najarian said he has been most impressed by the resilience of the tech sector. It is a lower-cost way to own the market, and it offers relatively high capital gains.

“The tech sector is clearly the one of the best performers in the market and it’s one of the best opportunities

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