Sharck, Any thoughts on playing the Nasdaq 100 reshuffle?
(First let me say I've been lurking here in The Soup for quite some time and I've been hanging out in the trading room over the last couple of weeks, You, M.E. & B.T. do a great job.)
Anyway, Dow Jones recently ran a story about the upcoming annual Reshuffle of the Nasdaq 100. Any thoughts on playing it for some swing trades? Based on the criteria, it looks like the changes are pretty easy to predict.
Here is the Dow Jones Article. Care to discuss?
Yoyo
----------------------------------------------
WSJ(11/9) Nasdaq 100 Shuffle To Bring About 13 Changes
By Karen Talley
Dow Jones Newswires
This year's shift in the widely followed Nasdaq 100 Index is
expected to bring 13 changes to the list of stocks on the roster.
The derby of who's in and who's out is considered important on Wall
Street, where about $20 billion is indexed to the Nasdaq 100 stocks
through an exchange-traded fund known informally as the Nasdaq QQQ, or
Triple Q. (The formal name of the fund is Nasdaq 100 Index Tracking
Stock.)
The annual shuffle will add those stocks whose market
capitalizations rank them among the top 100 nonfinancial Nasdaq
stocks. Battered stocks that are no longer among the 100 largest will
be shown the door.
Steve DeSanctis, market strategist at Prudential Securities who
examined potential additions and deletions, expects six of the
additions to come from the health-care field, four from consumer
services and three from tech. Tech accounts for 10 of the stocks to be
deleted, while two will come from the utilities sector and one from
business services.
Despite the deletion of the tech stocks, the Nasdaq 100 won't lose
its standing as a proxy for technology. The index is market-cap
weighted, meaning its biggest stocks will remain tech giants such as
Microsoft, Cisco Systems and Intel, and their moves still will have
the most influence on how the index acts.
The list is pretty solid, Mr. DeSanctis said, but he still is
awaiting a final count of shares outstanding as of Nov. 30 for the
companies involved.
The Nasdaq 100 shuffle is based on Nasdaq stocks' prices as of Oct.
31; the final roster takes effect at the close of trading on Dec. 21.
The additions in what Prudential calls the health-care field, most
of which are biotech-oriented, are expected to be: Cephalon,
Invitrogen, ImClone Systems, Sepracor, Icos and Cytyc. The
consumer-services additions,which actually have some leaning toward
technology, are expected to be CWD Computer Centers, Apollo Group,
Express Scripts, and Charter Communications. The tech additions are
Symantec, Semtech and Integrated Device Technology.
The 13 stocks that Prudential expects to be deleted from the Nasdaq
100 include several former tech highfliers. The anticipated deletions
include Broadvision, Real Networks, Novell, Palm, Ariba and CNet
Networks. Also expected to be ousted are 3Com, CMGI, Inktomi and
MetroMedia Fiber Network.
The tech trouncing actually may extend to all 13 deletions, except
that Prudential categorizes these stocks in a different way. For
instance, two stocks are defined as utilities, although they have
leanings toward telecommunications. The stocks are Level 3
Communications and McLeodUSA. And XO Communications, defined by
Prudential as a business-service stock, also is involved in telecom.
(END) DOW JONES NEWS 11-08-01
08:32 PM
- - 08 32 PM EST 11-08-01
--------------------
TAL News Server History:
ADD : 01/11/08 20:33 |
