Here is a "wrapup" from Briefing.com on Fridays action.
Tech Stock Analysis
Updated: 17-Jun-02
General Commentary
How ugly is this market? Well, for starters the Nasdaq just closed out its fourth consecutive down week... During this period, the index has shed 13.6%... But that's only part of the story... The tech heavy index has lost ground in 12 of the last 14 weeks, shedding an eye-opening 425 points, or 22%... While terrorist threats and overseas tensions have contributed to the market's somber mood, the real culprit behind this disturbing performance is the lack of an earnings recovery... As hope of a mid-year profit recovery faded, so did the market.
Investors have quite simply lost their patience and are no longer willing to buy in anticipation of a recovery... This attitude, reinforced by all the corporate finance shenanigans, helps to explain why the sector/market is having such a tough time stringing together a winning streak... Buyers are on strike and won't return to the market, with any consistency, until they see more compelling evidence of an earnings recovery.
Nevertheless, we did see more signs of short-covering and light institutional bargain hunting late Friday... Given the scope of the recent declines, it should come as no surprise that shorts are taking some profits... Meanwhile, some aggressive bulls (very much the minority) are using the deeply oversold technical tone and all the pessimism as justification for some bottom fishing... While this combination won't be enough to catapult the indices sharply higher over an extended period, it does suggest that the forces are in place for at least a modest corrective bounce... Fact that the sector posted a gain in the face of Friday's three-headed monster of terrorism, profit-warnings and disappointing economic news, lends support to view that the Nasdaq is poised for a short-term rebound.
First resistance comes in at 1550, with penetration setting up a retest of the 1600 area... More significant resistance is noted at 1667 (50-day moving average)... Index could climb as high as 50-day moving average without altering underlying bearish tone.
Robert Walberg |
