Industry analyses. Technology

All the trends in technology are still down. It is known that the numbers in the Durable Goods report do bounce around from month to month so it would be foolish to ignore these trends. Lets focus especially closely on the last few months. Here is where things get interesting. Tech indicators saying that low points were hit three to six months ago. The data for Shipments and New Orders have since then have shown a struggle to establish a bottom. We now see a few months of what could be characterized as erratic performance but definitely no new lows.
It is safe to say the tech sector is on the mend. Tech stocks have performed strongly over the last few months in anticipation of a recovery. The data do not yet show a V-shaped recovery but they do seem to show some kind of recovery in its early stages.
XLK is approaching its recent high, it is solidly above its 200-day moving average and its 50-day MA has just crossed above its 200-day MA.
I find interesting that most of technology companies not allocated much cash to equities. With so much cash and minimal or no debt on their balance sheets, these companies have the means to continue investing in internal growth initiatives and acquisitions.

Relative Valuation Chart -This graph shows the Percent to Target Current (Valuation Attractiveness) for a universe relative to the overall market. Values greater than 1 indicate the universe is more undervalued than the market, while values less than 1 indicate the opposite. The red line identifies the historical median value to provide a basis to understand valuation levels relative to historic norms. This example illustrates that the median Technology company is undervalued relative to the market currently and has been trading at a discount to its historic relative valuation, indicating a potentially attractive opportunity.

Technology Firms Continue to Downsize. There could be a number of reasons for the job cuts but it all boils down to “cost reduction”. Recession is always time to look to buisness and reorganize it more efficient. So we can expect that technology companies will become even more healthy.
Conclusion
Technology one of the most attractive industries in US economy now. Most of them have very strong balance sheets and only waiting for some economic growth. Classical coefficient saying that they are much undervalued.