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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 652.53

-1.5%

Nov 20 4:00 PM EST

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To: Doug who wrote (77273)	5/21/2001 3:02:06 PM
From: t2	Read Replies (2) of 99985

Naz enthusiasts say Tech stocks are undervalued by 20%. Could they be correct.?. I guess it really depends upon one's economic assumptions. A bottoming by this summer followed by a period of growth could mean they are undervalued. I don't don't think anyone really has a clue about the economy and therefore....don't have a clue about valuations in tech either. I guess people are also holding out hope for a return to recent higher PEs..or least get somewhat closer. All I see is that appetite for tech stocks is there; combined with a high short interest in the Naz....and we have a rally that lasts for a while. People have also made enough money in other sectors in the past 8 months or so to be willing to transfer some funds into the sector. Also read this Janus Funds report...they had lightened up on tech. Fidelity was already light in the sector. Therefore, we are less likely to see major selling from such large fund. So what do the tech shorts wait for? Redemptions from major funds? Too late! That may have already been played out in the first quarter. Maybe techs are NOT undervalued by 20% on valuation. Maybe they are just undervalued by 30% on MOMENTUM factors! <ggg> thestreet.com

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