AXXel's Preview of the 2001 Nasdaq 100 stocks-A tradable rally----but don't overstay your welcome
December 28, 2000
AXXel's 2001 Preview of the Nasdaq 100 Stocks
Using, AXXel Knutson's
VTAR™
["Volume Trade Analysis Research"™]
"Manage the risk…the profits will take care of themselves"
"In this business, being right is not as important as making money…consistently, and one of primary tenets of the quest is the avoidance of the 'obvious risk'"
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Nasdaq 100 Chart-courtesy of www.clearstation.com
The above chart pretty much tells the story for the largest of the Nasdaq stocks-almost all high technology and this crunch follows the best year for the same index. It's difficult to go through and as you will see from the comments on the stocks within the index that there is still some more room on the downside. That does not mean that we cannot participate within the index because we do have a number of strong buys. It is that they are the exception and not the rule. This has become a stockpickers paradise and that is exactly the market we like the best.
THE STOCKS:
3com Corp [COMS-7.75] murdered recently and an accumulate here in single digits]
12 Technologies, Inc. [ITWO-56.56] somewhat embryonic in development and capable of a nose-dive into the twenties. We would buy that nosedive if it occurred early in 2001.
Abgeniz, Inc. [ABGX-62.63] neutral…perhaps mid year 2001.
Amazon [AMZN-16.88] continues negative and we are expecting a break of ten before we could become interested. At some point AMZN has to concentrate on the bottom line and that means getting costs in line. Selling books and losing money on every sale cannot be fixed by just selling more.
Adc Telecommunications [ADCT-19.19] we will now rate neutral. The crash from the $40 level to current numbers has taken the fluff out for sure, but we need time to build a base and that can take months. Let it take its time, but we no longer rate as negative.
Adelphia Communication A [ADLAC-48.69] a buy and the consolidation that took the stock from $70 to the mid-20's was helpful.
ADLAC Communications [ADLAC-48.69] is rated positive by VTAR™ and we think that the stock could be interesting if purchased near the bottom of its trading range that it is developing of $25-50.
Adobe Systems [ADBE-65.50] the valuation is getting excessive. Negative.
Altera Corp [ALTR-28.00] the selling is speculative in nature, so let's accumulate the base at sub $20.
Amgen, Inc. [AMGN-65.69] looks like a rollover-why do this when you have Alza [AZA-43.31].
Apple Computer, Inc. [AAPL-14.81] only Apple has the potential to put some spice into the box market. Hold.
Applied Materials Inc. [AMAT-39.56] is negative and a sell on any strength which it could see from here, but this is not the type of pattern we will put to the long side. We don not buy high-risk stocks for "market" rallies.
Ariba, Inc. [ARBA-55.69] a buy later in 2001…it needs a quarter or three off.
AtHome Corp Ser A [ATHM-5.13] nope. We have no interest.
Atmel Corp [ATML-12.38] you may accumulate single digits
Bea Systems, Inc. [BEAS] sell the move toward triple digits. Excessive.
Bed Bath & Beyond [BBBY-23.75] a buy in spite of the fact I think their stuff is overpriced…I must be in the minority. Very decent base and we suggest you get it done.
Biogen, Inc. [BGEN-62.50] accumulate. You have a decent discount from the low triple digits.
Biomet, Inc. [BMET-40.19] a buy and right here. Supportive base and decent repetitive VTAR™ numbers.
Bmc Software, Inc. [BMCS-14.00] still negative. We will put this on our watch list for a break into the single digits. Crummy market for this stuff.
Broadcom [BRCM-90.00] although some of the selling is "speculative" in nature, we still rate this a sell-particularly in any move back into triple digits. It can and has rallied from the $70+ lows, but we think those numbers could be broken in 2001. We rate "Avoid" and is useful only for very high-risk traders.
Broadvision [BVSN-13.63] hard to believe given the tops at the $60 level, but here it is and we still have no intermediate-term interest for long-term buyers. That point could come however on a break of ten. We are just not there…we were in '98…but not in 2001.
Citrix Systems, Inc. [CTXS-24.13] although we would sell the rally that is likely to develop early in 2001, we would also buy the retracement back to sub $20.
Chiron Corp. [CHIR-46.94] is still embryonic is positive development and we rate this a hold and accumulate sub $40.
Check Point Software Tech - CHKP-135.13] is not immune to the valuation checkpoint. Let's rate negative…but look for a re-entry point later in the New Year.
Ciena Corp. [79.88] could be developing a blow off move over $100. We rate it a hold.
Cisco Systems [CSCO-40.75] although a rally could trace back part of the destruction [we have this rated a "Sell"], it is not interesting to us North of $20. Give us a break of $20 and we will re-evaluate. But not here for sure.
Cintas Corp [CTAS-53.31] a buy and we expect strong price improvement, as the attack on the $50 level will likely demonstrate the "new" base for the stock.
Cmgi, Inc. [CMGI-5.31] this could be the left leg of a base and if it is, we have plenty of time to accumulate. We rate neutral at this point and will not participate just now.
CNet Networks, Inc. [CNET-15.75] trying to build a base. Not yet for us.
Comcast Special Stock [CMCSK-41.19] Buy. We like the base.
Compuware Corp. [CPWR-6.69] overdone on the sell side. Accumulate these numbers.
Conexant Systems, Inc. [CNXT-15.00] took its lumps with Nasdaq, but he recent selling is very speculative. Buy.
Converse Technology, Inc. [CMVT-113.81] High-risk moderate reward. We will likely get a decent move from this base. So what? Who needs the obvious risk?
Costco Wholesale, Corp. [COST-37.19] sell the rally that will attempt to hit the $40's. There is no truth to the rumor that the Central Park Reservoir will be paved over for a new Costco and Home Depot. At least at Costco they don't yell at you over the PA system 'What the price of the toilet plunger in aisle 540B? -Price check please-this is my fifth request!"
Dell [DELL-18] just looks like a long-term sell.. Price objective is single digits where we think it will stay.
Concord Efs, Inc. [CEFT-46.56] we are buyers and feel comfortable right there. The base at the 25-30 level is supportive and the move to the forties looks as if it is already consolidated.
EBay, Inc. [EBAY-35.25] although the valuation continues very high, we are not willing to throw the leader over the side. But we are not willing to dive in and buy either…the answer to this dilemma is to buy large negative price moves. The next such move would take you into the $20's.
Echostar Communications Corp. [DISH-24.06] sell. Objective is single digits for us.
Electronic Arts, Inc [ERTS-44.38] positive and willing to accumulate in the $30's.
Ericsson, Lm Telephone Co. [ERICY-11.31] and is now an accumulate South of ten.
Exodus Communication [EXDS-20.81] sell. Single digits please.
Fiserve, Inc. [FISV-49.31] Buy. We like the base and we like the recent selling that has brought the stock back near its base. Get it done.
Chart-courtesy of www.clearstation.com
Flextronics International, Ltd. [FLEX-28.00] rolling over and consolidating. No interest. Give us a break of ten please.
Gemstar Tv Guide, Int'l [GMST-46.50] neutral and no strong opinion.
Genzyme Corp. [GENZ-89.75] buy and right here. Very solid VTAR™ numbers and we suggest you get it done-a break of $80 would be wonderful but here is OK as well.
Human Genome Sciences [HGSI-72.19] short term negative, but we will watch for an entry point.
Idec Pharmaceuticals Corp [IDPH-199.94] looks higher to us. We are not chasing this however…Put on your watch list for an opportunistic break.
Immunex Corp. [IMNX-43.06] a buy and a buy right here. We have a base in the $30's that can support the completion of the move from ten and that can take us almost to the $80's-no promises, of course.
Inktomi Corp. [INKT-22.31] the selling has been speculative. Let's make this negative but an interesting buy on a break into single digits.
Intel [INTC-32.56] rated buy. The base is here in the 30's so we can accumulate that base. But we will watch.
Intuit, Inc. [INTU-37.94] negative, but not massively so. Rated "accumulate" and that is in the low $30's.
Jds Uniphase Corp [JDSU-47.38] sell and looking for a possible interest South of ten.
Juniper Networks [JNPR128.06] conventional wisdom would suggest that this is a sell. We are going to differ but we do understand the risk. Accumulate.
Kla Tencor Corp [KLAC-33.63] sell the rally likely in early 2001.
Level 3 Communications [LVLT-32.81] negative, but capable of a rally to the 40's. We don't care.
Linnear Tech [LLTC-51.56] we have a sell on the stock but would feel comfortable accumulating a break of the $30's, but we are not there yet.
Maxim Integrated Products [MXIM-52.56] valuations suggest a rest…give it a rest.
Mcleodusa, Inc. Cl A [MCLD-14.25] rated accumulate particularly if we can see a break back into the single digits. We have patience.
Medimmune, Inc. [MEDI-50.38] Consolidating the large move of 10 to 70…it should take the year off in 2001.
Mercury Interactive [MERQ-100.63] the valuation gets us and we think it will get others. A source of funds for stocks with much, much lower risk elements.
Metromedia Fiber Network [MFNX-10.00] still negative…looking for a break of five to revive any interest on our part.
Millennium Pharmaceutical [MLNM-64.63] neutral. Our favorite is Alza [AZA-43.31] not this thing.
Microchip Technology, Inc. [MCHP-22.31] Later in 2001 and more toward ten…not here.
Microsoft Corp. [MSFT-46.44] our negative rating which first occurred in December 1999 continues today unchanged. We think MSFT's products are far from revolutionary, that it still has it head in the sand relative to the Justice Department and that there is a real threat from Linux.
Chart-courtesy of www.clearstation.com
Molex, Inc. [MOLX-38.94] a buy right here. The solid base is at $30 and the stock is embryonic and fresh. Get it done.
Network Appliances [NTAP-70.75] sell- we need a severe break to bring us to the buy side and that is certainly not North of $50.
Nextel Communications A [NXTL-24.06] negative-we need the low teens.
Novell, Inc. [NOVL-5.50] cash is not a replacement for performance and performance is something NOVL cannot figure out. Source of funds.
Oracle Corp. [ORCL-30.69] a short-term valuation problem. We will avoid in favor of PSFT or SAP -$33
Palm Inc. [PALM-28.63] violent for sure and fresh and embryonic in development. Buy the negative reactions in the $20's and below.
Panamsat Corp [SPOT-38.06] accumulate the twenties.
PMC-Sierra [PMCS-84.44] negative and we encourage selling on any move into triple digits. Any buy point for us suggests numbers in the sub $30 area.
Qlogic Corp [QLGC-78.81] a new sell on this stock…again it is valuation and our interest level is not North of $20.
Paccar, Inc. [PCAR-50.13] we remain very bullish on PCAR and suggest a "Strong Buy." Our price objective is to test, successfully, we think, the recent highs in the mid-60's.
Chart-courtesy of www.clearstation.com
Paychex, Inc. [PATX-52.81] tried to collapse with the rest of Nasdaq, but great numbers are precluding the swan dive. It appears much higher according to our VTAR™ numbers [again, no promises] but we are buyers.
Chart-courtesy of www.clearstation.com
Peoplesoft, Inc. [PSFT-40.56] taking the lead in enterprise software. Buy.
Rational Software [RATL-40.69] negative and looking for the base in the teens.
Realnetworks [RNWK-8.31] the selling is overdone, but this is likely only the left leg of the consolidation. Let's re-visit Labor Day.
Rf Microdevices [RFMD-29.00] negative with a price objective from a valuation method of single digits.
Sanmina Corp [SANM-75.69] a buy here with a price objective of triple digits that we think will hold in 2001. The base is solid in the 50-60 level and although the group is offering no help [printed circuit boards] this could be the exception.
Sdl, Inc. [SDLI-165.00] how's this for a range for the last 52 weeks: $85.81 - 460.50? Enuf of a range for ya? Part of the reason is the few shares outstanding [87mil and about 59 mil in the float but with a beta of plus two, you must really have your seat belt on-no debt, lots of cash and revenues and losses through the roof. But that doesn't help you does it? It will help if you let this stock take another year off.
Siebel [SEBL-75.69] not exactly a bargain basement valuation, but we will rate SEBL "accumulate."
Smurfit-Stone Container [SSCC-16.00] Strong buy. Very solid base and in the right area for us. Do it. Expect a sharp clunk from the recent stab to the upside. Buy that.
Staples, Inc. [SPLS-11.25] we are looking for sub five and panic selling.
Starbucks [SBUX-44.25] no opinion.
Sun Microsystems, Inc. [SUNW-30.38] sell. We may re-kindle interest at single digits or the low teens and there are only TWO low teens.
Tellabs, Inc. [TLAB-56.50] neutral. Give us a negative break into the 30's and we could go positive.
Tmp Worldwide, Inc. [TMPW-54.06] short-term negative…accumulate back at the base in the twenties.
Qualcom [QCOM-89.88] negative. Perhaps a buy late in the New Year.
Usa Networks, Inc. [USAI-19.25] Accumulate and expect an attack on the mid twenties high according to our VTAR™ numbers.
Verisign [VRSN-81.31] negative in the intermediate term but capable of a rally into triple digits at which point it becomes a sell. We would like to buy later in 2001 South of $50.
Veritas Software [VRTS-93] accumulate the expected weakness. We have a base of sorts right here, so let's accumulate the negative breaks South of that base and that suggests the $60's.
Vitesse Semiconductor [VTSS-59.06] Let's buy this in the semiconductor group. The stock short-term could tank but that would take us into an embryonic base, so let's hoe that happens. Buy the price destruction in the 30's if possible.
Voicestream Wireless [105.44] negative and looking at sub $50 for any interest on our part.
Worldcom [WCOM-14.06] we are proud that we have always hated this company and that is paying off. Give us a break of five and we could be enticed.
Xilinx, Inc. [XLNX-48.19] accumulate-the stock is rather fresh in development but we are not going to chase it either.
Xo Communications Class A [XOXO-17.25] accumulate the break of ten.
Yahoo! Inc. [YHOO-29.75] although capable of a decent rally from the price destruction, we remain negative as we have since Christmas of 1999.
DISCLAIMER
Investment decisions should not be based solely on our proprietary indicators, which are intended as an adjunct to your additional analysis. Please accept these comments as market commentary. We do not intend these comments to replace detailed fundamental analysis. We urge you to accomplish that additional research via your contacts on the Internet or through a trusted financial advisor. If you want additional information on any of the securities discussed within, we will give it upon your request.
This report has been prepared from original sources and company data we believe to be reliable, but we make no representation as to its accuracy or completeness. This report is published solely for information purposes. It is not to be construed either as an offer to buy or sell or the solicitation of an offer to buy or sell any security or the provision of or an offer to provide investment services in any state where such an offer, solicitation or provision would be illegal. Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice and we may not update that change to you. The opinions expressed are that of AXXel Knutson and are not necessarily representative of First Allied. First Allied Securities, Inc., its affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold, or sell a position in the securities mentioned herein.
The author of this report, Axxel Knutson, does not invest in any of the securities mentioned in this report nor does his immediate family unless such securities are included in mutual funds or index options. Equity investment involves risk of capital loss. We recommend that your portfolio be diversified by company size, industry group, and geographic region and by currency.
It should not be assumed that future selections will be profitable or will equal the performance of past selections. Securities listed herein illustrate selections made using proprietary indicators known as VTAR™ [Volume Trade Analysis Research™]. These names, VTAR™, Tradingweapon, www.TradingWeapon.com TradingEngine™, www.tradingengine.com ™, Volume Trade Analysis Research™, are servicemarks/trademarks of AXXel Knutson.
All recommendations and commentary are directed toward sophisticated, aggressive traders who have significant experience trading in a volatile market and who possess the financial resources to risk a loss of some or all of their invested funds. Commissions and, if you use margin, interest charges will lessen any return on investment. VTAR [Volume Trade Analysis Research] centers around the proprietary analysis of trading volume, price, general fundamental analysis, beta concerns, group rotation and detailed analysis of risk as it relates to entry and exit points in reasonably liquid stocks.
Axxel Knutson, President
axxel@blast.net
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VTAR [Volume Trade Analysis Research] ™
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Telephone: 908-647-5750; FAX 708-585-6185.
AXXel Knutson is a registered Principal of and securities are offered through
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Axxel is guest co-host at JAGfn's Internet television every two weeks or so-tune in at www.JAGfn.com.
AXXel's show, VTAR™ "Buy, Sell, Hold or Jump Off a Bridge" is heard on wwww.radiowallstreet.com live at 2PM every Thursday-just go there and you can hear it live. Radio Wall Street also hosts a Message Board for questions about stocks, "Buy, Sell, Hold or Jump off a Bridge." As a reminder, you can call in questions to me at AOL's "MarketTalk", produced by Sage every Tuesday at 2PM Eastern- [you must be an AOL member] Transcripts are available via SageOnline
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If you want me to handle your account…
In response to inquiries relative to opening securities accounts handled directly by AXXel Knutson, here is the deal: Accounts are handled directly by Knutson with First Allied Securities, Inc. TradingWeapon.com offers all of its securities business through First Allied Securities, Inc., a member of the NASD/SIPC. Bear Stearns Securities Corp. is the clearing agent for First Allied. There are no additional investment management fees and there is no sharing of profits or losses. Client-selected stocks may not enter the account unless approved by AXXel and this is not a likely occurrence. AXXel hates your stocks. The minimum account accepted is $100,000. Sob stories are listened to for amounts under $100k but rarely accepted unless AXXel is in the mood. These accounts tend to be trading accounts so don't even ask if you can't stand the activity and at times total inactivity and cash. AXXel does not personally trade in the same stocks as clients or those written about in his newsletters or spoken about in media appearances although First Allied Securities, its brokers and its officers may take and have positions although they receive no advance notice of new recommendations or changes in opinion. The opinions expressed within are those of AXXel Knutson and may not be shared by First Allied Securities, Inc. Those interested in additional information on any stocks discussed within may call at 908-647-5750 or email AXXel at axxel@blast.net. We do not deal in BB stocks [with the exception of some ADR's]. Refreshing, isn't it?
AXXel Knutson's VTAR™ Research at www.TradingWeapon.com. You may email AXXel at axxel@blast.net or you may not; it's up to you after all.
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