Buy: Semis (SMH 35.30) are now the "undervalued" technology area

Rational: Semiconductors are rallying nicely this morning as institutions re-focus their direction toward technology names. Considered undervalued at this stage, technically the Semiconductor ETF (SMH 35.30) is close to reaching a new breakout level. Expect a break higher with prices reaching the prior spring'06 levels at $38.

Target: 38.50 level ( prior resistance level)

Stop: 32.5 ( lower base area)