Some stocks are already testing lows, particularly in fiber sector and B2B. (CMRC below 5 for the 1st-time! CMRC as Rat-dog <g>) This was pretty predictable I think. The highest high fliers that were cult-valued will retest and make new lows, possibly to retest those in the Fall. I am less sure that the NDX 100 type of stocks such as AMD, DELL, CSCO will do so. I think that institutions may hold these and not lose their bargain basement long-term core buys from April. But, that all depends on the news that the economy is at least stabilizing. In any case, the indexes do not reflect the poor state of things with the speculative stocks such as fiber, e-commerce, B-to_B, etc. I do suppose that Fiber will come back before e-companies and perhaps this rond of lows fo the fibers will be like the late 2000 lows for AMD, LRCX, KLAC, etc and the April lows for INTC, CSCO,BRCD etc. The key is to be aware of which sector is actually bottoming out rather than watching the market as a whole. I think that that is easier to see. One can enter longs phase by phase as each successive bottom of the Naz as a whole takes down different sectors.
I do think that fiber is most vulnerable now and also presents the best chance of putting in a true bottom that will be met with institutional buying in July. I think that we may see FBCE at or below 4 again, FNSR in single digits, GLW and JDSU near single digits. CIEN at new low. I will be watching whether JDSU swoons next week or recovers.
I am less sure about storage stocks. Whether they will retest April lows and whether this will actually be the final bottom for them. But i would keep a close eye on EMLX and NTAP.
I would also watch the utility companies such as T and WCOM as well as less traditional ones as ELNK and AOL for buying opportunities here. Perhaps ATHM will finally find a bottom here as well.
For this round I am staying away from B2B, b2c, etc. as i see no institutional interest following a bottom here. |
