Outlook. Dan Niles on CNBC
" we'll rally for 1 - 2 weeks then we sell off again ".
Same as 1996: we had a 25% rally in Jan and April.
Then we went 33% lower in June - July. In August
you back up the track ".
and in StreetCom:
thestreet.com
" Look at 1996 if you want to know what the
semiconductor stocks will do this year, advises Niles.
So far, he's been right. January's rally strikingly
resembles the 30% first-quarter rally that year.
And if this year continues to follow 1996's outline,
there will be another rally of similar magnitude in the
April-May time frame.
This summer, though, the analyst expects the stocks to give
all that back, and more -- which is exactly what happened
in mid-1996. In his estimation, the stocks could dip as
much as 15% below their first-quarter lows.
"The stocks will wash out in summer as earnings estimates
move to lower, more achievable levels," Niles asserts.
We shall see. We shall also see if Niles is right in naming
late July-early August as "a terrific time to buy these
stocks." He adds: "That should be the start of the next
multiyear upcycle, during which many will appreciate
between 100% and 200%."
The Lehman analyst couldn't be clearer when he
recommends "not owning any of these stocks" between now and
then. He is equally direct when he tells investors that,
come August, they should be prepared to "back up the
truck." |
