Briefing Says the Coming Dip will be Short and Shallow
Update May 3rd, 2001
General Commentary
Friday's jobs report, a 7% 3-day rally and resistance at 2250 give traders an excuse to take some profits off the table in today's session... However, based on Wednesday's action Briefing.com more convinced than ever that the coming dip will be short and shallow... Simply too much money chasing the sector, as underweighted portfolio managers tripping over themselves to get back in.
Fueling the feeding frenzy - comment from Advanced Micro Devices (AMD) that chip business will trough in Q2; comments from Brocade (BRCD) at Merrill conference that storage sector will recover in Q2/Q3; favorable comments from Morgan Stanley on Cisco (CSCO); and statement from Broadcom (also at Merrill conference) that inventory correction will have run its course by Q3/Q4... Collectively these comments confirm trader perception that tech earnings will begin recovering by Q401 - and that the time to buy is now.
Traders beginning to hunt for the stocks left behind during the first major run... Some of the names that drew interest yesterday included Oracle (ORCL), Sun Micro (SUNW), StorageNetworks (STOR), DoubleClick (DCLK), INRANGE (INRG), Sycamore Networks (SCMR), JNI Corp (JNIC), Metromedia Fiber (MFNX), Level 3 (LVLT) and i2 (ITWO)... Still lagging but poised to participate more fully - Compaq (CPQ), Hewlett-Packard (HWP), Computer Sciences (CSC), Motorola (MOT), ADC Telecom (ADCT), CacheFlow (CFLO) and AT&T Wireless (AWE). |
