Eoin Treacy's view The technology sector has always been highly competitive and this is unlikely to change. However 2013 is likely to mark an important milestone in its evolution. The trajectory of chip development, which has seen chips sizes halve and speeds double every two years since the 1950s (Moore's Law), is set to decelerate to approximately every three years. The reason for this is because as the “gates” on a chip approach the width of a silicon atom, the issues of heat dissipation and size represent progressively more important challenges. This has accelerated the search for an alternative to silicon and explains why there is such excitement about the potential for graphene and carbon nanotubes.

In the meantime, one of the reasons ARM Holdings has done so well is because the energy efficiency of its designs has made them indispensable for manufacturers of handheld devices. The share broke out of an 18-month range in October and hit a peak near 1000p at the beginning of this month. It is currently consolidating and a sustained move above 1000p would be required to reaffirm the medium-term uptrend. It would be best bought following a reversion towards the mean, represented by the 200-day MA.

While ARM Holdings, Apple and Samsung have garnered the most media attention, there is also a group of companies that are worthy of mention because they have underperformed. The tech bust that followed the boom of the 1990s saw a significant number of companies disappear. Others such as Google waited until after the crash to list. Amazon and Apple were among the first to bounce back and hit new all-time highs. A large number of shares related to the cloud computing sector broke out in 2010. Therefore the companies that remain in base formations today do so for a reason.

Broadcom, Texas Instruments, Cisco Systems, STMicroelectronics, Micron Technology, CA Inc., Xilinx, Linear Technology, Akamai Technology and Fairchild Semiconductor all remain in more than decade-long base formations. Increased demand for internet connectivity from both the corporate and domestic sectors might yet be the catalyst for base formation completion. Seagate Technology and Symantec have completed bases relatively recently while CA Inc. from the above list has the most well-defined progression of higher reaction lows within its base. (Also see David's piece above).