Just to post a reference document here from the "tech side" of Briefing.com'
<<Updated: 09-May-02
General Commentary
Wednesday's session was like a blast from the past, as techs surged in response to good earnings news from Cisco Systems (CSCO)... The Nasdaq rallied 122 points, or 7.8% - its biggest percentage gain since April of 2001... But it felt more like 1999, as double-digit gains were the rule rather than the exception: Cisco +24%, Extreme Networks +30%, BEA Systems +29%, Mercury Interactive +22%, PMC-Sierra +23%, PeopleSoft +19%, Applied Materials +14%, Broadcom +14%, Veritas +16%, Siebel +16%, Dell +15%, Oracle +11%, Qualcomm +19%, Juniper +14%, Tellabs +14%, Texas Instruments +11%, Flextronics +15%, Sanmina-SCI +16%, Yahoo! +11%, Brocade +25%, Emulex +28% and QLogic (which provide a positive earnings surprise of its own) +27%.
Was the advance an overreaction to Cisco's earnings? Yes. Was the move largely due to short-covering? Yes. Did deeply oversold technicals and major supports in the SOX and the BTK (biotech index) contribute to the rebound? Yes. Were the gains a welcome relief from the day-to-day drudgery of the past couple months? YES, YES, YES... Are the gains sustainable? Ahh, that's is the big question and the one that isn't so easy to answer.
Follow-through buying has been missing from most of the rally attempts over the past few months... Consequently, gains fizzle out almost as quickly as they develop, with the end result being increased pessimism... Failure to build on this gain over the next couple of days/weeks, would certainly be a blow to what few bulls remain... However, the widespread nature of yesterday's advance, the spike in volume and the fact that the indices closed at their highs suggests that the rebound might actually have some legs.
As we noted on this page yesterday, it's going to take more than one good day - even if it was a sensational one - to turn the sector/market around... Wednesday's gain will only be an impressive start if buyers continue to step to the plate... We know it's possible - as many tech stocks more than doubled after initially selling off in reaction to 9/11... As such, we will be monitoring market closely for signs of real buying (not just short-covering) in the days ahead.
Robert Walberg, Briefing.com>> |
