ChartWatch: Top Stock in the IT Sector

In the second quarter alone, Apple (NASDAQ: AAPL) sold 35 million iPhones and nearly 12 million iPads. While that’s a great success story for Apple (and Apple shareholders), those mobile devices are creating a huge need to expand data traffic infrastructure. This expansion may act as an even bigger boon to certain companies in the IT sector.

In 2011, the world trafficked about 0.6 exabytes of data per month. What’s an exabyte? It's a billion gigabytes …or a million terabytes. If that sounds like a lot, it’s nothing compared to what the world will record a few years from now as the smartphone market expands.

According to Cisco (NASDAQ: CSCO), mobile internet data traffic more than doubled in 2011, marking the fourth consecutive year data traffic doubled. Cisco expects the rate of traffic will double every year through 2016 when it will reach 10.8 exabytes per month.

Our businesses and network need to meet the demands of future data traffic, and they will need help.

F5 Networks (NASDAQ: FFIV) provides IT solutions to help companies deal with the increased demands that mobile computing, smart-phones, tablets, cloud computing and cloud data storage put on their networks. F5 is a company sure to thrive as smartphones, such as the iPhone, take over the network.

F5 has a variety of products aimed at things like accelerating data center performance, integrating cloud computing solutions, increasing security, simplifying data management, and virtualizing servers. While business should remains solid, the stock has come on hard times.

However, the chart reveals that now could be an optimal time to purchase the shares. FFIV shares are at a level (blue line) that provided support in November and December. Although it took a little over two months, that support zone prepared the shares for a rally to $139.46 from $98.

After a sizable fall in June, F5 came back to the $98 support zone. While it may take another few months to blast higher, this area has proven to be a springboard for rallies in the past. chart shows the price of F5 shares along with an important support area for you to monitor

Equities mentioned in this article: AAPL, CSCO, FFIV

To top