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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 676.41

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To: Johnny Canuck who wrote (35361)	12/3/2001 2:22:06 AM
From: Johnny Canuck	Read Replies (1) of 69099

Applied Materials. Novellus Systems (NVLS, news, msgs) spent a good portion of its Oct. 15 earnings conference call complaining about prices in the market for equipment that deposits metals and insulating materials on the wafers that eventually become computer chips. There's really only one company strong enough to challenge Novellus in this, its product stronghold, and that's Applied Materials. Novellus management went so far as to say that it had never seen so bad a pricing environment. To me it sounds like Applied Materials is up to its usual tricks. In every down cycle for the chip-equipment business, Applied Materials uses its size -- $9 billion in annual sales to Novellus's $1.4 billion -- and financial clout -- $1.4 billion in cash on hand at the end of the July quarter vs. $700 million for Novellus -- to batter away at the markets it doesn't already dominate. With the upturn in the fortunes of the chip-equipment makers not likely to arrive until late 2002, I think it's still too early to load up on this stock. But Applied Materials again looks like a recession winner. moneycentral.msn.com

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