RECAP & STOCKS TO WATCH FOR THURSDAY, 12- 27-00
The stock indices held on to broad-based gains on Wed., with the chip and retail sectors leading the rally. The Semiconductor Index (SOX) jumped 4.3% to finish above 600 for the first time in over 2 weeks. The last week of the year has traditionally been bullish for stocks.
The Nasdaq Composite added 45 points to close at 2,539. Volume was 1.9 billion shares, with 129 stocks making new highs compared to 385 new lows. Blue chips added to their gains from Tues., as the Dow surged 110 points to finish at 10,803. Volume on the Big Board was 1 billion shares, with 318 stocks making new highs compared to 86 new lows.
From a technical standpoint, the Semiconductor Index (SOX) is further forming a double bottom that could provide a test of resistance at the 650 level. If the index can penetrate that, the double bottom would be confirmed and set the index up for a test of the 850 range. A move above 650 would be seen by traders as encouraging, as the chip sector often leads the rest of the techs. The Nasdaq Composite has filled the gap down that was made on Dec 20, so the next few days will be key to watch. Also, the Nasdaq is possibly forming an “inverse head and shoulders,” another bullish signal.
The SOX on a daily basis: tradewindsonline.net
Volume should be returning to the markets next week, as the focus will shift full force to the expected Fed easing at the January FOMC meeting. However, the “talking heads” are going overboard and are now predicting a 50 basis point cut, and therefore possibly setting us up for a short-term rally into the meeting, and then a “sell the news” pullback.
Intel (INTC): TechWeb.com reported that there is a flaw in the Intel Pentium 4 chip that Intel has reproduced on its own hardware. TechWeb said that "revised chips will be sent to OEMs in the next few weeks, but it will take time for them to pass OEM tests and finally be introduced into the channel."
i2 Technologies (ITWO): Company announces the acquisition of the content divisions of Trade Services Holdings and its affiliate, ec-Content for $5 mln in cash and approximately 2.3 mln shares of i2 common stock.
S&P 500 Changes: Jabil Circuit (JBL) will replace Coastal Corp. (CGP) in the S&P 500 Index after the close of trading on a date to be announced. |
