Big Tech Investors Will Book Big Profits This Month

Selling accelerated this morning after an impressive run-up produced by Fed dovishness and mega-tech stock earnings reports. It's true that over the last two days, the tech mega caps have taken a pretty good beating, but it's also just as true their recent earnings have helped fuel optimism.

But the charts don't lie: No matter how you slice it, "big tech" - especially the FANGs - is still the No. 1 destination for intermediate- to long-term investing.

"How can that be?" I can hear folks asking after the past few years of scandal upon unsavory revelation upon sell-off, "Surely these companies' best days are behind them."

I've got one word for you...

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The Word Is... GROWTH

Anyone who has owned a business or been involved in the financial end of a business knows how maddeningly difficult it is to sustain double-digit growth over any number of years.

The bigger the revenue gets, the harder that growth becomes.

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That's precisely what makes the continued 20% or more year-over-year growth of the FANG stocks so impressive - and so investible.

Feast your eyes on the FANGs' quarterly revenue growth results for the most recent quarter, all reported in the last two weeks:

If we allow Amazon.com Inc. (NASDAQ: AMZN) to round up, that's four out of four with 20% or more revenue growth. Just amazing.

The pullback of the past two days will give us an opportunity to buy some stocks that were getting overbought, in the short term, as of Tuesday. And I do believe that we have a strong expectation of a continued move up over the next two weeks.

On Thursday of last week, we got a volume spike in the S&P 500, which as you can see from previous occurrences in September, October, and January, is usually a sign of a short-term market reversal:

However, something unusual happened after last Thursday's volume spike: We had the following three days continue in the direction of the big "up" volume day, with all three having higher highs, lows, and closes.

This shows strong momentum.

And this pattern has only happened 30 times since 1995. Fully 23 of those occurrences, or 77%, saw the market close higher two weeks later, with the average gain being three times greater than the average loss.

So the market remains under strong momentum, and a pullback like today just gives us a good buying opportunity.

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About the Author

D.R. Barton, Jr., Technical Trading Specialist for Money Map Press, is a world-renowned authority on technical trading with 25 years of experience. He spent the first part of his career as a chemical engineer with DuPont. During this time, he researched and developed the trading secrets that led to his first successful research service. Thanks to the wealth he was able to create for himself and his followers, D.R. retired early to pursue his passion for investing and showing fellow investors how to build toward financial freedom.

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