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Technology Stocks : Nortel Networks (NT)
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To: OrionX who wrote (8389)11/7/2000 12:13:53 AM
From: Warren Gates  Read Replies (1) of 14638
 
FESH is just the messenger. His views are legitimate enough. CAPEX slowdown and potential bandwidth glut are real legitimate concerns. NT wasn't cut in half because of retail selling of stock. There is some big distribution going on in the telecom equipment arena. This does not mean that NT should be sold. Just look at Dell. As bad as its fundamentals are, it was able to rally back to the 50-day moving average. There is money to be made in buying NT at this level. It would be foolish though to assume that it will go back up to 80 in a heartbeat. Too much technical damage has been done. But it is a great play for what I believe will be a retracement back to 60.

There is money to be made even in this kind of market. Yes, fundamentals are deteriorating for tech stocks in general, but we are seasonally at the best time when liquidity is at the highest. I wouldn't touch NT if I don't see bleeding everywhere. But since this sector has been beat up badly, there is a bounce that can be played, just as what happened to the PC sector. It is prudent though that come the DECEMBER preannouncement period, investors go more into cash. January earnings announcements can be brutal.

On another note, CISCO is probably benefitting a lot from this long haul fiber-optic buildout. The bottleneck at the core has been moved over to the edge of the network and this should benefit the router boys.
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