Nasdaq ended the day with a decent gain...up +25 (1.2%) to 2,142...trading was light however as only 926m (normally well over 1bn) shares were traded...as many opted to stay home due to winter storms...
Dell Computer up +6.2%, Intel up +3.6%, JDS Uniphase up +7.3%, Cisco Systems up 4.0%, and Applied Materials up 5.1% among the big-cap names pushing the Nasdaq higher...
It was surprising to many that tech stocks gained in spite of several revenue warnings issued by semiconductor companies before the market opened...
Chip equipment maker Cymer for example said it is lowering its revenue and net income projections for the first quarter and full year 2001 due to changing market conditions. The sahres still traded up 81 cents to $22.94...
"Once the market has fallen far and fast, there tends to be a pause," said Brett Gallagher, head of U.S. Equities and deputy chief investment officer at Julius Baer...
The question is now if Nasdaq finally touched a bottom last week...analysts' comments seem to be mixed in answering this question...
Starting with the hesitant ones, Charles Lemonides, chief investment officer at ValueWorks said to the cnnfn, "The markets were collapsing a week ago Friday, and it seemed like we were darn close to a bottom that day as well," adding "Whether or not we have definitely reached a bottom or whether this is a near-term bottom will depend on whether the economy improves or not...and that will be a function of what the (Federal Reserve) does."
But he added that he was optimistic the Fed would cut aggressively cut interest rates to lift the economy and the stock market...
Merrill Lynch's Richard McCabe mentioned a strong March-April recovery in a note to clients, "The additional weakness in Nasdaq last week has compounded its oversold condition. We still expect a strong March-April recovery," he said..adding "Some money managers are apparently feeling pressure for performance reasons to sell tech stocks. [But] sentiment indicators showed some further improvement last week and are moderately favorable on a near-term outlook basis. They are still relatively unimproved from a major trend perspective..."
Should the investors jump in?
No..according Tom Peterson who said, "The old adage is 'the trend is your friend' -- and like all the old sayings it's true. There's no sense in trying to be a hero in picking the bottom when one is ignoring the dominant trend. There should be no rush to buy in a bear market. Since a bottom has to be formed anyway, there will be lots of rallies and retracements to be used for positioning. Experienced investors know that it's always wise to wait for the secondary testing of lows to prove sellers are finished before stepping in," in the newsletter Bulls Eye Research...
Lynn Reaser, chief economist and senior market strategist at Banc of America Capital Management on the other hand talked about tech companies not being clear about the economy's near-term prospects commenting:
"Technology was the last sector of the economy to leave the party, and it could be the last to rejoin. Oracle's [warning late] Thursday suggested that companies are still unclear about the economy's near-term prospects, causing many of them to defer spending -- even on software..."
Over all...bottom or near the bottom...one can clearly see change of tune...doesn't look as doom and gloom as it used to be...still sideways for a while I think with bounces up and down...but down bounces could be bigger than ups untill a sustained trend starts...well at least it is not one way street any more I should conclude...
Just one thing to add...I think the UK tech stocks are either already at the bottom or closer to the bottom then the US ones...as in any sign of positive news from the US they seem to be prepared to bounce up properly...still we have to be cautious and keep avoiding holding tech stocks for long term for a while to be on the safe side...for those with intra day/hour trading skills/opportunities I think this market provides good trading opportunities...as long as we make sure we don't get stuck and not let our short term trades turn into very long ones...
Riz
[Edited by rizgar on 05-03-2001 at 10:57 PM]
Dell Computer up +6.2%, Intel up +3.6%, JDS Uniphase up +7.3%, Cisco Systems up 4.0%, and Applied Materials up 5.1% among the big-cap names pushing the Nasdaq higher...
It was surprising to many that tech stocks gained in spite of several revenue warnings issued by semiconductor companies before the market opened...
Chip equipment maker Cymer for example said it is lowering its revenue and net income projections for the first quarter and full year 2001 due to changing market conditions. The sahres still traded up 81 cents to $22.94...
"Once the market has fallen far and fast, there tends to be a pause," said Brett Gallagher, head of U.S. Equities and deputy chief investment officer at Julius Baer...
The question is now if Nasdaq finally touched a bottom last week...analysts' comments seem to be mixed in answering this question...
Starting with the hesitant ones, Charles Lemonides, chief investment officer at ValueWorks said to the cnnfn, "The markets were collapsing a week ago Friday, and it seemed like we were darn close to a bottom that day as well," adding "Whether or not we have definitely reached a bottom or whether this is a near-term bottom will depend on whether the economy improves or not...and that will be a function of what the (Federal Reserve) does."
But he added that he was optimistic the Fed would cut aggressively cut interest rates to lift the economy and the stock market...
Merrill Lynch's Richard McCabe mentioned a strong March-April recovery in a note to clients, "The additional weakness in Nasdaq last week has compounded its oversold condition. We still expect a strong March-April recovery," he said..adding "Some money managers are apparently feeling pressure for performance reasons to sell tech stocks. [But] sentiment indicators showed some further improvement last week and are moderately favorable on a near-term outlook basis. They are still relatively unimproved from a major trend perspective..."
Should the investors jump in?
No..according Tom Peterson who said, "The old adage is 'the trend is your friend' -- and like all the old sayings it's true. There's no sense in trying to be a hero in picking the bottom when one is ignoring the dominant trend. There should be no rush to buy in a bear market. Since a bottom has to be formed anyway, there will be lots of rallies and retracements to be used for positioning. Experienced investors know that it's always wise to wait for the secondary testing of lows to prove sellers are finished before stepping in," in the newsletter Bulls Eye Research...
Lynn Reaser, chief economist and senior market strategist at Banc of America Capital Management on the other hand talked about tech companies not being clear about the economy's near-term prospects commenting:
"Technology was the last sector of the economy to leave the party, and it could be the last to rejoin. Oracle's [warning late] Thursday suggested that companies are still unclear about the economy's near-term prospects, causing many of them to defer spending -- even on software..."
Over all...bottom or near the bottom...one can clearly see change of tune...doesn't look as doom and gloom as it used to be...still sideways for a while I think with bounces up and down...but down bounces could be bigger than ups untill a sustained trend starts...well at least it is not one way street any more I should conclude...
Just one thing to add...I think the UK tech stocks are either already at the bottom or closer to the bottom then the US ones...as in any sign of positive news from the US they seem to be prepared to bounce up properly...still we have to be cautious and keep avoiding holding tech stocks for long term for a while to be on the safe side...for those with intra day/hour trading skills/opportunities I think this market provides good trading opportunities...as long as we make sure we don't get stuck and not let our short term trades turn into very long ones...
Riz
[Edited by rizgar on 05-03-2001 at 10:57 PM]