Technology Trading: Useful Facts
Technology changes quickly and continuously. Companies come and go in the technology industry with perhaps more volatility than the market itself. The average trader may not even recognize the names of many tech sector companies whose products they use on a regular basis. There are of course a number of these businesses that are household names and are in the news regularly when earnings are reported or new products are announced:
Apple has been one of the top stocks in the tech sector as viewed by analysts for quite some time. Analysts have recently expressed concerns whether Apple will be able to continue their level of success with the popular iPhone. Chinese sales of iPhones were up last quarter but those results still fell short of analyst expectations. iPad sales have been lagging in recent months, although the company’s stock is up 8% for the year.
Apple CEO Tim Cook is considered a strong asset to the company bringing about an internal shift of culture that encourages collaboration and provides an environment with less finger-pointing and blame for mistakes or failures. Apple is considered by many to be the brightest light in global technology markets with its flagship iPhone and now the Apple watch gaining popularity.
Another leader in technology investor portfolios is of course Microsoft. The company has announced special deals for consumers coming for Black Friday and the holiday season offering bargain access to digital movies, music, apps, and games. They’re promising something for everyone on your holiday shopping list for devices connected to Microsoft’s Windows 10 operating system.
Communications companies such as wireless or smartphone sectors seem to always be in the news with acquisitions and new or improved product offerings. A recent example is Finnish company Nokia’s $16.6 billion offer to acquire Alcatel-Lucent generating a combined corporation that is the second-largest mobile communications manufacturer in the world with an estimated 35% market share. Wall Street in general loves acquisitions, making this a positive move for Nokia.
Semiconductor market sector companies are similarly known for acquisitions to improve market share and obtain new market participation or manufacturing capacity. Dialog Semiconductor plc shareholders in a recent meeting supported the acquisition of Atmel Corporation which is seen by both the companies and investors as a mutually beneficial relationship.
Factors that Impact Tech Stocks and Technology Trading
Numerous factors are at work influencing technology stocks and trades:
- Economic factors such as the sluggish Chinese economy and global economic conditions such as those experienced this year in Greece
- Impact of global economics on such industries as semiconductor manufacturers
- Rapid changes in technology itself that both obsolete existing markets and open new opportunities
- Changing consumer market participation – trends away from personal computers have resulted in a lower demand for PC-specific components.
- Management shakeups and corporate reorganizations (could be either positive or negative)
- Supply and demand: as companies enter the technology sector – or leave – supply is directly impacted that can influence product price and in turn stock prices. Technology markets are highly competitive.
- Software markets continuously evolve and may gain or lose popularity. As consumers and businesses change methods of communicating and solving technical problems investors can be taken by surprise due to sudden changes in stock value. Even the most experienced analysts can sometimes find it difficult to predict these activities with any level of certainty.
Technology Trading Markets
Technology sector companies fall into several general categories:
- Software – developers of applications for use by business or consumers
- Hardware – manufacturers or integrators for computer components or complete systems
- Networking equipment and internet providers – this can include everything from home network equipment to global communications systems utilized by service companies and large enterprises
- Semiconductors – these are the companies designing and manufacturing the chips and processors that are integrated into everything from large-scale business computers to mobile equipment such as tablets and smartphones.
Depending on a trader’s familiarity with any of these markets or the companies that fit into each category, this could influence investment strategy or confidence in which category to trade in – or a mix of multiple segments.
Investors in the technology sector are well-advised to be aware of news impacting their existing or proposed investments since tech stocks can turn quickly and even unexpectedly. Utilizing an online broker with news feeds and real-time market updates can increase the possibility of success in technology investments.
Technology Trading and Day Traders
Technology stocks are especially subject to global influences. Leading companies in the tech sector are headquartered around the world while the majority of components are manufactured in countries located in the Far East. Varying hours of operation across stock exchanges can impact day trading results in tech stocks, making timing of buy and sell orders critical. Trades executed at a less than opportune time can affect gains or losses considerably and every percentage point counts for day trading success.
SureTrader is a leading online broker that provides clients with information and stock tickers to keep traders constantly aware of tech stocks and news that could impact prices in real-time. Clients can keep up to date on news, analysis of stock activities, and trends providing an advantage over other online brokers. SureTrader’s support is not only available to our clients on a 24×7 basis to answer any questions and resolve problems, but each and every question is handled in a friendly and courteous manner. Utilize information from multiple exchanges and in national and global markets to make the right investment choices that align with your individual financial strategy.
SureTrader’s lightning-fast execution of your trades ensures that you accomplish the timing you expect giving you a competitive advantage. Desktop and mobile applications ensure timely and flexible access to SureTrader services – iOS and Android platforms are each supported. Leverage SureTrader’s global services to make trades quickly and easily even in after-hours trading.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.