RECAP & STOCKS TO WATCH FOR FRIDAY, 12- 29-00
Another day of “déjà vu” as today’s session was characterized by mostly listless trading as traders hesitated to commit before the last trading day of 2000. Days like today make those 500-point ranges only a fleeting memory. After a choppy start, the major indices managed to round up enough buying interest to extend yesterday’s modest gains. The Nasdaq was pressured by big-cap leaders Intel (INTC), which reached a new 52-week low today, Microsoft (MSFT), JDS Uniphase (JDSU), Cisco (CSCO), and Sun Micro (SUNW). Additional pressure loomed from this morning as Prudential Securities reduced Q4 revenue estimates on both Dell Computer (DELL) and IBM.
The Nasdaq Composite added 18 points to close at 2,557. Volume was 2.1 billion shares, with 166 stocks making new highs compared to 295 new lows. This ratio of Nasdaq highs/lows has steadily been improving. Blue chips tacked on another 65 points for the 5th positive session in a row to finish at 10,868. Volume on the Big Board was 1 billion shares, with 383 stocks making new highs compared to 53 new lows.
From a technical standpoint, the Semiconductor Index (SOX) continues to grind out 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. Additionally, SG Cowen told clients today that many chip stocks appear to be bottoming, naming PMC-Sierra (PMCS), TranSwitch (TXCC), Integrated Silicon Solutions (ISSX), and Qlogic (QLGC) as the best candidates to meet or beat Q4 estimates. A move above 650 on the SOX would be seen by traders as encouraging, as the chip sector often leads the rest of the techs. Also, the Nasdaq is possibly forming an “inverse head and shoulders,” another bullish signal.
Friday will determine if the Nasdaq Composite closes in the red for the 4th consecutive month (we need to close at 2598 to prevent this) and/or puts in the worst year on record (we need to close at 2640 to prevent this).
Applied Micro Circuits (AMCC): Company moves into the S&P500 index after the close.
Osicom Tech (FIBR): Traded up to after hours after optical website Light Reading reported speculation that Sycamore (SCMR) is in negotiations to buy another optical firm, and that the target might be Sorrento Networks, whose parent is FIBR. |
