Tech investors have been looking for excuses to sell for weeks, but Activision gave them a reason to buy on Tuesday. Buoyed by strong sales of Guitar Hero and Call of Duty, the game developer substantially raised its outlook for the critical holiday quarter. The company was quickly rewarded with a bump of nearly 14% in its share price as tech stocks and the market as a whole rebounded from Monday’s drubbing Whil Tech investors have been looking for excuses to sell for weeks, but Activision gave them a reason to buy on Tuesday. Buoyed by strong sales of Guitar Hero and Call of Duty, the game developer substantially raised its outlook for the critical holiday quarter. The company was quickly rewarded with a bump of nearly 14% in its share price as tech stocks and the market as a whole rebounded from Monday’s drubbingWhile Activision isn’t exactly a bellwether stock, its strong forecast offers a somewhat brighter outlook for holiday spending than we’ve been hearing. “We are well on our way to delivering our 16th consecutive year of revenue growth and the most profitable year in our history,” crowed Chief Executive Officer Bobby Kotick. “Due to the strong consumer response to our slate through October and strong retail sales over the Thanksgiving weekend, we are raising our financial outlook for the December quarter and the fiscal year,” he said. The company raised its third quarter forecast by 15 cents to 66 cents a share, on sales of $1.23 billion. On a continuing operations basis, the company expects 70 cents a share–which easily exceeds Wall Street’s expectations of 56 cents a share on sales of $1.04 billion. For 2008, Activision forecasts adjusted profits of 85 cents a share on sales of $2.3 billion, compared to an earlier forecast of 65 cents a share, on sales of $2.07 billion. Analysts were looking for profits of 69 cents a share, on sales of $2.09 billionMeanwhile, Dell is expected to beat Wall Street’s sales expectations for the October quarter when the PC maker reports financial results on Thursday, says Shaw Wu, an analyst with American Technology Research. Although Wu is not particularly bullish on Dell, he says “Our sense is that PC demand in Q4 is shaping up better than expectations, even for weaker players.” He figures Dell will add $300 million to Wall Street’s forecast of $16 billion in sales for the quarter, and equal the consensus earnings forecast of 38 cents a share. Even more important in the broader scheme of things will be the company’s forecast for the January quarter, which includes the holiday season. Wu rates the stock as neutral, and says both Hewlett-Packard and Apple have “much stronger fundamentals and more attractive valuations.” If Wu is wrong, and the stock doesn’t deliver strong sales, expect a very negative reaction to ripple through other consumer-related tech stocks. Finally, the most interesting event of the next few weeks will likely be the Dec. 11 meeting of the Federal Reserve’s Open Market Committee, which sets short term rates. There’s already some chatter that the Fed will back off its stand-pat stance and cut rates by as much as half a point. That’s pretty speculative, because it still appears that Chairman Ben Bernanke is more concerned about the threat of inflation than the slowing of the economy. Whatever he does, it will quickly move the market. Stay tuned. I welcome your suggestion, tips and comments. Reach me at bill.snyder@sbcglobal.net Technology Industry