3 Technology Stocks That Are Headed Higher

TM Editors’ Note: This article discusses one or more microcaps/penny stocks. Such stocks are easily manipulated; do your own careful due diligence.

The Federal Open Market Committee meets on September 16th and 17th. Many analysts anticipate that the Fed will raise interest rates by a quarter point (25 basis points). This would be the first rate increase in nearly 10 years, with the last occurring in June of 2006!

I have predicted that the Fed would not be able to raise rates as soon or as sharply as most people were expecting. This has proven to be true, with a series of pushbacks on the expected date for rates to go up. They are now looking for the Chinese markets to stabilize before the meeting, but I think this is just a convenient excuse for not raising rates. Sure, the slowdown in China is very real, but the true reason they may pass on raising rates in September is that the U.S. recovery is not nearly as robust as most investors believe.

I believe that the stock market, bond market and real estate market cannot handle much of a rate increase. They have been pumped up on artificially low rates and Fed stimulus. Take those things away and the current valuations don’t quite add up. The World Bank today commented that a Fed rate rise would cause panic and turmoil in the markets.

As an investor in technology stocks, I think we are being given a pretty decent buying opportunity at the moment. If I am correct and the Fed fails to raise rates in September, the most likely outcome is an immediate rally in equities. The markets have priced in a rate increase, so if it doesn’t happen, watch for a nice move higher. Technology stocks that have been beaten down over the past few weeks are likely to bounce very strongly.

The market turned higher today with the major indices up 2.5% or more. However, volume was weak and there are plenty of signs that the worst of the correction is not over. The Dow is still in a technical correction, down 10% from its recent high. The major indices also remain below their respective 200-day averages.