Up Next: “Garbage Tech” Makes a Comeback
The tech sector is leaving the rest of the stock market in the dust.
Apple, Google, and Facebook are posting new all-time highs every single week. The Technology Select Sector SPDR (NYSE:XLK) is up almost 14% year-to-date. That blistering performance easily tops the other eight major S&P sectors.
XLK’s five biggest holdings—Apple, Microsoft, Facebook and two classes of Alphabet stock (GOOG and GOOGL)— are each up double-digits in 2017. It’s shaping up to be a banner year for mega-cap tech…
Now it’s time for the tech sector’s benchwarmers to get a little love.
Remember Twitter Inc. (NYSE:TWTR)?
Twitter is the social media also-ran that could never break through as a public company. The stock peaked shortly after its IPO in late 2013 and never once made a serious run at its highs. It’s been stuck in a downtrend ever since.
But lately, this sorry stock is starting to get its act together. Shares are up double-digits this week, spiking above their 200-day moving average for the first time since February. The stock is now positive on the year (and nearly 20% off its lows).
You could chalk up Twitter’s renewed strength to a solid earnings report released last week or a newly-announced partnership to create streaming content with Bloomberg. Heck, even billionaire investor Mark Cuban is getting bulled up on the blue bird. Cuban went on the boob tube yesterday to sing Twitter’s praises for getting into the artificial intelligence game. He’s buying shares. Other investors are following his lead.
Twitter’s not the only down-and-out tech stock attracting buyers this week. There’s another forgotten tech industry that’s also bouncing off its lows.
I’m talking about 3D printers…
Yes, even our favorite forgotten garbage stocks are getting in on the action. That might sound a little harsh. But remember, 3D printers have been stock market pariahs for years.
You might recall the 3D printing craze of 2012-2013. It was an amazing run for 3D printer stocks. When these names were hot, there was nothing this new technology couldn’t do. The go-to trade was 3D Systems Corp. (NYSE:DDD) – which returned an impressive 140% in 2013.
But by the very next year, the hype got out of hand. The tech prognosticators said every family would soon own a 3D printer that would spit out replacement parts, toys and custom-made widgets. In reality, all we were getting was plastic junk from the consumer models. The red-hot trade soon began to fizzle. Just a few weeks ago, you could pick up DDD stock for about $14 a share.
If you’ve been around these parts long enough, you know that we made more than a few profitable trades on the 3D printers in the past. In fact, we were able to book gains of 20% in just five days during DDD’s epic run-up off its January bottom back in 2016.
Comeback moves like these are custom built for short-term traders. That’s why it pays to sift through the stocks that have been down on their luck for months. The ones showing signs of life could offer up the chance of fast double-digit gains in this market environment.