Novellus Tests Its 50 Day Moving
Average
An InvestorLinks Exclusive Report
Senior Columnist: Joe Duarte, January 3, 2001
Technology Summary
Despite the big hit to the Nasdaq Composite, the extremely oversold Philadelphia
Semiconductor Index (SOX) slept through much of the whole thing, with key
stocks in the index either hugging the unchanged line, or failing to break to new
lows. The technical indicators also continue to show that a bottom is continuing
to be put in place. The key is the lack of the MACD oscillator to fall to a new low,
even as the index continues to flirt with the possibility of at least testing the old
lows. The key is the 550 area. If the index can hold above this support level and
rally, it could find its way back into the 600-700 area. But even if the index
holds, there is no evidence of panic in the options. Thus, this remains a basing
pattern at best in the short term.
The Tech Stock Of The
Day:
Novellus (NVLS, Chart,
Boards) Tests Its 50
Day Moving Average
Nasdaq is burning, but
the chips are holding.
And Novellus is now
above its 50 day moving
average, having
resisted the temptation
to fall below the support
level. The stock has
also formed a head and
shoulders bottom,
which could be a bullish
development if it
continues.
The stock has tentatively continued to claw its way out from a bottom near the 25 area. There is overhead
resistance at 40, which remains the first test. But, for value investors, this is a tough one to pass up as it
sells at 18 times earnings. We suggest watching the next few days. A break above 40 could take the
stock to 55.
investorlinks.com |
