This week we are going to look at the Telecom sector. We have not reviewed this group of stocks since last July so with the gains that it has shown lately, we thought that this would be a good time. Many of the companies that make up this sector should be familiar to you. Some of these include AT&T (T), Nextel (NXTP), and Qwest (Q). Since the last time that we reviewed this sector, the index that we will be looking at, the Dow Jones Telecom Sector Index (DJUSTL) has gained over 10% and we expect the gains to continue.

You can see in the chart that we have provided the activity of the Telecom index for the last year. Notice how strong the trend has been since the beginning of the year. It has gained about 15% in the last three months alone. You can see, at the bottom of the chart, that the Williams %R indicator is strongly in the "overbought" area, but for this we think it is just a good indication of a strong trend, such as the time earlier in the chart. We believe that this trend will continue until the sector reaches 160 at least but would put a stop point around 140.

As we mentioned above, if you would like to invest in the Telecom sector, there are plenty of well known companies and also many not so well known stocks out there. In addition to that, iShares has a fund that trades the index that we talked about, its symbol is IYZ. There are also many mutual funds that have exposure to Telecom.

Price Headley is the founder and chief analyst of BigTrends.com.