RECAP & STOCKS TO WATCH FOR MONDAY, 1-22-01
The major indices all joined together for a week of positive action, as traders and investors responded favorably to most earnings reports and ignored negative forecasts.
The Nasdaq Composite held on for another 2 points on Friday to close at 2,770. Volume was a healthy 2.6 billion shares, helped by options expiration, with 63 new highs compared to 16 new lows. Blue chips gave back Thursday’s gains as the Dow lost 90 points, 20 of it due to a warning by Home Depot (HD), to finish at 10,587. Volume on the Big Board was 1.4 billion shares with 119 stocks making new highs compared to 9 new lows.
Many fund managers who entered the New Year underweight in tech stocks are now eating the dust of the Nasdaq’s double-digit year-to-date return. The longer the market shrugs off bad news, the greater the probability that these managers will be forced to move cash off the sidelines and into techs. Although we may see a pullback after the Fed meeting, the change in market psychology the past 2 weeks almost ensures that the big players will be buying the dips. With 49 percent of the 137 S&P 500 companies that have reported fourth-quarter earnings beating analysts' expectations, and 17 percent missed forecasts (compared to 33 percent a year ago), the odds of an underpinning bid in the market remains high.
From a technical standpoint, the Nasdaq Composite is showing a bullish continuation candle on the weekly chart. Support on the Nasdaq Composite stands at 2,740-2,680, with resistance at 3,000. Support on the Semiconductor Index (SOX) stands at 630, with resistance in the 750-780 area.
The Nasdaq Composite on a weekly basis:
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Earnings Spotlight: The focus on earnings continues this week as the following companies are due to report: Freemarkets, Inc. (FMKT), McAfee.com (MCAF), Openwave (OPWV), Silicon Labs (SLAB), Texas Instruments (TXN), and Vitesse Semi (VTSS) on Monday, Cypress Semi (CY), EMC Corp. (EMC), Interwoven (IWOV), LSI Logic (LSI), Nextel (NXTL), Tellabs (TLAB), New Era of Networks (NEON), Anaren Microwave (ANEN), Avanex (AVNX), Broadcom (BRCM), Checkfree (CKFR), Compuware (CPWR), Lam Research (LRCX), Millennium Pharm (MLNM), Powerwave Tech (PWAV) , Qlogic (QLGC), and Siebel Systems (SEBL) on Tuesday, E*Trade (EGRP), Lucent (LU), Power-One (PWER), Akamai Tech (AKAM), Amgen (AMGN), Cirrus Logic (CRUS), Corning, Inc. (GLW), Exodus Comms (EXDS), Immunex Corp. (IMNX), McData (MCDT), MedImmune (MEDI), Newport Corp. (NEWP), Next Level (NXTV), SDL, Inc. (SDLI), VeriSign (VRSN), and Veritas Software (VRTS) on Wednesday, Celera Genomics (CRA), BroadVision (BVSN), Corvis (CORV), E.piphany (EPNY), Excite@Home (ATHM), Gilead Sciences (GILD), JDS Uniphase (JDSU), PMC-Sierra (PMCS), Qualcomm (QCOM), and Sapient (SAPE) on Thursday, and Level 3 Comms (LVLT) and Ericsson (ERICY) on Friday.
Amgen (AMGN): A court has ruled that Transkaryotic (TKTX) infringed on three Amgen patents. Goldman Sachs says that TKTX will probably appeal, but that it will be difficult to overrule on all three, and that this is a clear win for Amgen. |
