With the SMH acting well and the HHH Internet ETF coming back strongly, two important technology sectors are poised to move considerably higher.  Within the SMH, let's take a look at AMAT (14% of the SMH).

For the better part of 2006, the price action in AMAT produced a huge base-like pattern that is nearing completion, and which could trigger a powerful advance during 2007. Todayââ,¬â"¢s up-spike off of the July-January uptrend (especially the series of higher lows) is approaching a test of critical intermediate-term resistance at 19-20, which if hurdled should unleash a powerful upside follow-through towards a next target of 22.

Only a failure to do so, followed by a decline that breaks 18, will significantly weaken the developing chart pattern.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.