From Briefing.com: So the markets put together a respectable rally on the session. In fact, consistent with this year's broader theme, the Nasdaq paced the day's gains for the broader markets. The index managed a single day gain of 17 points, or 1.2%, on notably strong total volume approaching the 1.8 billion share mark.
Now frequent readers may recall that coming into this week -- on Monday, May 19th -- we took a consolidative stance on the Nasdaq's near-term outlook, and established this near-term 'bias range' for the index. This bias range was somewhat broader than your typical 'technical level' -- extending from 1487 to 1504 -- because in reality, it encompassed three distinct areas of interest.
Those three areas broke down as follows: 1) the 1504 level, which marked the top of an Island Reversal pattern on the hourly chart, 2) the index' 20-day exponential moving average which has ranged from 1493 to 1495 over the prior three sessions, and 3) the 1487 level, which marks bottom of that same Island Reversal.
Now with those three areas identified, the relevant passage from the Monday review follows: "Broadly speaking, the index has what should be a decent range of support in the vicinity of 1487 to 1504. If the index would violate that broad range on a closing basis, it would be time to look towards more distant support points, and the prospect for a lengthier consolidation phase."
As it turns out, the index managed to hold that 1487 level on a closing basis in each of the prior three sessions. The index closed Monday at 1492, finished Tuesday at 1491, and closed yesterday at 1489. So while the lower end of our near-term 'bias range' received a good solid test, it never was violated on the close.
So the price action over the prior three sessions -- Monday through Wednesday -- set the stage for our more bullish take on the markets this morning. We noted the Nasdaq had finished Wednesday's session by carving out an indecisive 'doji' on the candlestick chart. A doji is a session in which the opening and closing levels are very close to the same level -- in the case of yesterday's session 1488 and 1489 respectively.
The doji is conventionally interpreted to represent hesitation or indecision. So the doji is useful to the extent it can serve as an early signal to a trend reversal. Yet the unfortunate aspect of this single candlestick pattern is 'hesitation' does not necessarily translate to reversal. The doji can serve as a reversal, or continuation, pattern.
As a consequence, we looked towards other indicators, which were consistent with a reversal of the near-term consolidative bias initiated Monday. First, the index had these three consecutive closes within that tight three-point range of 1489 to 1492. Again, the lower end of our bias range at 1487 had managed to hold to this point (and has since). Additionally, the positive bias early this morning had the index back above its 20-day exponential moving average.
The end result was today's 'respectable' rally in which the index closed within the upper quarter of its intraday range. Again volume was on the strong side, and the market internals came in comfortably bullish, though far from extreme -- advancing volume outpaced declining volume by roughly 3 to 1.
The straight technical read favors additional follow through based on the picture as it stands at today's close. Note the index topped out today just under our 1513 resistance level -- today's intraday high was 1512.8. So that 1513 will be an area to watch tomorrow followed by what 'should be' more formidable overhead at that longer-term level around 1521. -- Mike Ashbaugh -- Briefing.com
6:00PM Credence offers $150 mln of convertible notes (CMOS) 7.91 +0.01:
Another tech company to deliver better than expected results was Marvell (00C0 29.81 +2.86), the leading global semiconductor provider of complete broadband communications and storage solutions. MRVL reported Q1 (Apr) earnings of $0.19 per share, $0.02 better than the Reuters Research consensus of $0.17. Revenues for the quarter rose a whopping 70.3% year/year to $168.3 mln vs the consensus of $162.3 mln.
4:07PM Marvell beats by $0.02 (MRVL) 27.55 +0.60: Reports Q1 (Apr) earnings of $0.19 per share, $0.02 better than the Reuters Research consensus of $0.17; revenues rose 70.3% year/year to $168.3 mln vs the $162.3 mln consensus.
3:17PM Marvell Earnings Preview (MRVL) 27.84 +0.89: Marvell Technology Group reports its Q2 after the close today with the consensus earnings estimates of $0.17 per share and revenues of $162.3 mln. Going into the qtr, most analysts appear to be very bullish on its prospects of beating consensus numbers. Thinkequity calls co its "best mid-cap stock going into its earnings report" and has been bullish on both its exposure to the HDD markets and Gigabit Ethernet product ramp. Wachovia also indicates that qtr is on track for upside. With such high expectations going into the report, MRVL will probably need to deliver a knock-out qtr to keep its positive price momentum intact. CIBC is of the opinion that positive news may be viewed as "expected" and "priced" and would wait until after report before getting aggressive.
9:37AM Westell Tech upped to Outperform at Baird; target $9 (WSTL) 6.64 +0.39: The upgrade from Neutral is based on improving DSL prospects, improved visibility and improved financials. Firm increases estimates for FY04 and FY05 and raises price target to $9 from $5.
9:35AM National Semi (NSM) 23.07: Deutsche Securities downgrades Hold to SELL . Believes that valuation already assumes relatively strong 2nd-half and CY04 rebound.
Transmeta (TMTA) 1.36 +0.07: Company's processor selected fro HP Compaq Thin Client t5700.
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+BRCM+CMOS+INTC+KLAC+LLTC+LSCC+LSI+MOT+MRVL+MU+MXIM+NSM+NVLS+TER+TMTA+TXN+WSTL+XLNX+^IXIC+^NDX+^SPX+^VIX+^VXN+^STI.N+^STI.O+SMH&d=t
Thanks for your insights Kirk! Good luck with the bond play.
RtS |
