Briefing-"Tech investors might want to take advantage of the bullish sentiment to start taking some profits off the table over the next couple of weeks."
Updated: 10-May-01
General Commentary
Once again, the tech sector absorbed ugly news from Cisco Systems (CSCO) without much pain... Ability to shake-off company's bleak earnings/guidance proves that bulls remain in control of the market, and that the path of least resistance (over the short-term anyway) is still to the upside.
However, in order to successfully trade the markets it's important to routinely assess the risks to your portfolio... While there was nothing in the Cisco (CSCO) numbers to change current bullish sentiment, the report did provide a glimpse into the future, and as Yogi Bera once said, "the future ain't what it used to be." In short, Cisco's management said nothing to suggest an earnings trough in Q2... Though Briefing.com doubts there are many on the street operating under such an (optimistic) assumption, reality is that investors will need to brace for another nasty warnings season come June... Doesn't matter that we know the bad news is coming, the sheer volume will be enough to depress market psychology, if only temporarily.
With the Cisco report reinforcing the upcoming earnings risk, tech investors might want to take advantage of the bullish sentiment to start taking some profits off the table over the next couple of weeks.
Please don't interpret today's commentary as a change in our bullish stance on the sector... Briefing.com still sees lower interest rates, stimulative fiscal policy, softer Q400/Q101 comparisons and ample cash reserves as forces which will a) limit any near- to intermediate-term downside risk and b) propel sector materially higher into year-end... Just thought the Cisco report provided a good opportunity to caution bulls against complacency - especially with the earnings hurdle just ahead.
Robert Walberg |
