See Jim Jubak Wednesdays on CNBC's Business Center . That's a very positive sign for technology stocks. Individual stocks and markets as a whole don't usually recover from big drops that extend over a long period of time with a quick bounce. Instead, they build a new foundation, a base that can serve to support a gradual climb by the stock. That's exactly what might be happening with these technology bellwethers.
Bases can fail under the impact of negative fundamental news.
Technology companies could give investors a bushel of bad news in April when they talk about their predictions for business in the June quarter. And bases can provide the foundation for substantial rallies that ultimately fail to break a bear-market downtrend. In my opinion, it's too early to pick one of those scenarios as the likely winner. This is still a time for caution while investors wait to see how long the recent downturn in business for PC makers, chip companies, networkers, and telecommunications gear manufacturers will last. I'm willing to pass up a few points of quick gains right now so that the trend can establish itself more strongly.