If you’re looking for one of the driving forces of the current bull market, look no further than the tech sector.

Case in point: The Technology Select Sector SPDR (XLK) – the exchange-traded fund that tracks the S&P 500 Technology Index – is up a whopping 229% since the start of the bull market.

But the wheels are wobbling.

Thanks to big first-quarter earnings misses from Apple Inc. (AAPL), Alphabet Inc. (GOOGL), and Microsoft Corp. (MSFT), the sector has fallen by almost 1% since the start of the year.

[ad#Google Adsense 336×280-IA]The broader tech-based Nasdaq Composite has declined even further – down 5% year to date.

This should come as no surprise, as stock valuations have climbed sky-high and investors are taking their growth stock profits on any sign of weakness.

But as I wrote last week, the “smart money” is betting on value.

And amid the richly valued tech sector, I’ve uncovered an incredible value stock making big moves this year…

A Cheap Diamond in an Expensive Rough
CA Inc. (CA) is one of America’s largest software solutions providers. Founded in 1976, the company holds more than 1,050 patents worldwide, with another 950 patents pending.

Over the last 10 years, the stock has notably lagged the broader tech sector, gaining 35.7% compared to 108% for the S&P 500 Technology Index.

But this year, shares have risen 6%, versus a meager 0.2% gain for tech stocks.

As I mentioned earlier, investors are on the hunt for value as stocks climb to historically high prices – especially in the tech sector.

And CA is chock full of value.

  • The stock trades at 12 times forward earnings, besting its peers by 16%.
  • The company also sports a forward price-to-book ratio of 2.2, less than half the industry average of 4.8.
  • At its current price, shares offer a forward dividend yield of 3.4%. That’s 54% higher than the S&P 500 and more than double the tech sector yield.

And while CA’s valuation is undoubtedly impressive, its chart reveals an even more compelling opportunity.

Highway to the Profit Zone
As I mentioned a moment ago, CA shares are up 6% in 2016.

But that’s only part of the upside story.

After falling to within 2% of its 52-week low amid January’s broad market selloff, shares have since taken off.

From its January low to its March high, CA shares jumped by over 20% – nearly double the rise of the S&P 500.

As you can see, shares broke through resistance in February at the December 2015 closing high of around $29.36.

Shares overtook their 200-day moving average for the first time since last July.

The stock’s recent rise is backed by long-term support, too. In fact, CA’s January bottom corresponds with a support line that hasn’t been broken for longer than one week since 2008!

That’s what I call strong support.

And this support level is going to come in handy ahead of the toughest months for stocks of the year – between May and August.

Best of all, not only is CA enjoying strong support, its momentum is also increasing.

Strength Beyond Strength
The stock’s relative strength index (RSI) is currently 51.1 and rising – up from 33 at the January low.

As you may know, this indicator measures momentum over a 14-day period on a scale from 0 to 100.

The concept couldn’t be simpler: A rising RSI implies increasing momentum, while a falling RSI can signal waning strength.

Right now, CA’s RSI reading is well below the “overbought” threshold of 70, meaning that shares have plenty more room to run before exhausting the upward trend.

Bottom line: If you’re hunting for tech value with generous upside over the summer, look no further than CA. But don’t wait too long, or you might miss the flight.

On the hunt,

Jonathan Rodriguez

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Source: Wall Street Daily