Thinking back to early 2000, I thought the NASDAQ stock market would eventually trade at 5,000, but I wasn’t sure about how long it would take. Well, now it looks like the answer at the time would have been around 15 years.
After a decent run this year, the NASDAQ stock market is trading within 300 points, or 6.2%, of the magical 5,000-point level. The index is leading the broader market higher this year with a 12.75% advance and is continuing to show promise on the chart with a bullish golden cross, based on my technical analysis.
Investor sentiment has been bullish on the NASDAQ stock market in 14 of the past 16 sessions to Tuesday.
And similar to late 1999 and into early 2000, stock market euphoria for technology stocks is driving the buying. Back then, much of the interest was in the emerging Internet and broadband space, which was somewhat still in its infancy. At this juncture, the stock market interest has not only focused on the Internet space, but also on the mobile, chip technology, and social media areas.
As I’ve been saying for years, technology stocks are continuing to provide investors with the best upside opportunities to earn aggressive gains.
Of course, the technology sector had a bump in early to mid-October with the NASDAQ stock market down as much as 10%. However, the index has since fully recovered and is establishing its highest point since the infamous days back in 2000.
The chart of the NASDAQ stock market shows the steady advance since the bottom in 2009 and the emergence from the Great Recession. The NASDAQ will likely break 5,000 in early 2015 if the current market bias holds. A move to the all-time high at around 5,100 is also within grasp.
Chart courtesy of www.StockCharts.com
NASDAQ 5,000 Investment Opportunity?
My feeling continues to be that the technology sector will drive the stock market in the decades ahead. The stock market rewards innovation, so it makes sense to be invested in technology.
While I cannot tell you what I think the top areas of growth in the technology sector will be in a decade or longer, my sense is that it will continue to be in some form of communications, mobility, Internet services, or social media.
While you can continue to buy the market leaders in each area—such as Apple Inc. (NASDAQ/AAPL), The Priceline Group Inc. (NASDAQ/PCLN), Facebook, Inc. (NASDAQ/FB), and Google Inc. (NASDAQ/GOOG) to name a few—you can also play this possible investment opportunity via various exchange-traded funds (ETFs). In this case, you may want to take a look at an ETF like the Technology Select Sector SPDR ETF (NYSEArca/XLK). For a more aggressive play, you may consider an ETF like the PowerShares S&P SmallCap Info Tech ETF (NASDAQ/PSCT).