Technical analysis: Patrick Lyons sees potential in a few tech stocks.

TECH STOCKS TOOK A FEW HITS IN JANUARY AS SOME leading names announced weaker than expected earnings. But Patrick Lyons, an equity portfolio manager with NCM Capital Management Group Inc. in Durham, North Carolina (No. 7 on the BE ASSET MANAGERS list with $2.4 billion under management), maintains a positive outlook. He notes that through the end of January, the Nasdaq composite index has climbed more than 20% since July.

A 12-year veteran with NCM Capital, Lyons says that despite the upswing, some of technology's biggest names are still bargains. As a chartered market technician, he focuses on analyzing stock performance charts to identify patterns that may signal future growth. Specifically, he looks for dominant players in their industries that sport annual earnings growth of at least 10% and strong cash flows. Lyons' stock picks meet those benchmarks and have compelling stories as well. "Some are preparing to unveil new versions of popular products," he says, "while others are fundamentally changing direction in promising ways."

LYONS' STOCK PICKS

        Harris                     Intel
         Corp.
         (HRS)                    (INTC)

        Price:                    Price:
        $49.25                    $20.71

12- to 18-month target:   12- to 18-month target:
        $67.00                    $24.00

      P/E Ratio *               P/E Ratio *
         15.4                      15.5

Est. 5-year annual EPS    Est. 5-year annual EPS
     growth rate:              growth rate:
          16%                       12%

    Why stock will            Why stock will
      outperform:               outperform:
   The international       Intel has pulled out
  communications and          of telecom and
  technology company      other sectors to focus
 has a strong position        on what it does
as a provider of equip-     best-making micro-
   ment that allows             processors.
 broadcasters to move
 to digital television
      standards.

       Microsoft                  Oracle
         Corp.
        (MSFT)                    (ORCL)

        Price:                    Price:
        $31.11                    $17.27

12- to 18-month target:   12- to 18-month target:
        $36.00                    $20.00

      P/E Ratio *               P/E Ratio *
         18.3                      15.6

Est. 5-year annual EPS    Est. 5-year annual EPS
     growth rate:              growth rate:
          12%                       15%

    Why stock will            Why stock will
      outperform:               outperform:
  Upgrades of two of       The database company
Microsoft's bread-and-     has added application
butter software appli-    software to its product
 cations are due to be     roster through acqui-
  released early this     sitions, and now offers
  year, and its Xbox        customers one-stop
   game consoles are             shopping.
     selling well.

       Qualcomm
         Inc.
        (OCOM)

        Price:
        $38.87

12- to 18-month target:
        $45.00

      P/E Ratio *
         18.9

Est. 5-year annual EPS
     growth rate:
          20%

    Why stock will
      outperform:
  Licenses to use its
  clear, secure cell
 phone technology are
    in demand among
  companies building
 wireless networks in
 the developing world.

SOURCES: NCM CAPITAL MANAGEMENT GROUP, YAHOO FINANCE 'BASED
ESTIMATED EARNINGS FOR THE NEXT 12 MONTHS. DATA AS OF JAN.
19, 2007. LYONS DOES NOT HOLD SHARES OF THE RECOMMENDED STOCKS