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Technology Stocks : Semi Equipment Analysis
SOXX 299.81+2.7%Dec 19 4:00 PM EST
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To: Gottfried who wrote (269)1/19/2001 1:25:56 PM
From: Donald Wennerstrom  Read Replies (1) of 95617
 
Gottfried,

At the very top level, I think it boils down to 1 or 2 things. First of all, the Fed has started easing rates. Many people think they will do what it takes to "turn the economy around" - this means higher stock prices. Secondly, given you believe the Fed will turn the economy around, tech stocks is assumed to be the highest growth area, ergo, the move to make is to get back into the sector - the sooner the better. Particularly since many tech stocks, semi-equips for one area, have been terribly oversold - see many of the previous posts on semi-equip evaluations going forward. The move already in stock prices since the Fed made their announcement has left several entities behind. I like what Robert Walberg of Briefing.com has the following to say today.(emphasis mine)

<Desperate... That's the word that best describes portfolio managers that entered the year underweighted in technology and failed to jump in as soon as the Fed cut rates... These managers are now chasing the tech rally and will continue to do so for fear of missing out on the next big move... This helps to explain why tech stocks are rallying even though much of the earnings news and forward guidance isn't that good.>

Don W.
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