Did any one notice, on Friday NASDAQ posted the biggest point gain
of 35 points ever. The previous biggest point gain of 33 points was
on July 17th 1996. If you look as the chart of all quality SEMI stocks
of 1996 like INTC, IBM, MSFT, WDC, CSCO. USRX, COMS, NSCP that made recordshigh's
in 1996, they all started to rise at the same time, that was July 1996
till Dec 96/Jan 97. Some of these quality stocks formed a platform
around their highs of Dec 96/Jan97 like INTC, MSFT, IBM the rest were considered
over priced and gave back lot of the gains.
I think it will be a wrong time to sell a stock that is considered a
trend stock of 1997 e.g AMAT, LSI, VLSI, DELL, CPQ, INTC, MSFT. If ever
the trend of last year is to be repeated, it is just the beginning. Remember
the 35 point gain was not induced by you and me, but big players who
think these stocks are cheaper than the cheapest stocks.
I know its very dufficult to seek a trend from the previous trend
because a lot of the economic conditions may be very different, but the
economic condition has never been better than in 97. With an accord to
balance of budget and the economy in europe & US still picking up, we
are about to see a long summer rally. Of course there will be dips, but
the solid grounds form a good platform.
Only what concerns me is the high dollar. Its good for european global
companies, but not for US companies, but since most of the global playes
hedge against dollar it should not be a problem till end 97. I know
microsoft has hedged till end 97. |
