From Briefing.com: So as it turns out, the Nasdaq did indeed meet with sell pressure right around that 1619 level. The index touched an intraday high at 1520.7 Monday before backing off to close towards its worst levels of the session. Consistent with the recent pattern, total volume was decidedly strong with the Nasdaq surpassing the 2.5 billion share mark.
Now it's worth noting this 1619 area isn't just any random level. Frequent readers know this target technically ranges from 1614 to 1619, and was initially identified as an area of interest back on April 23rd. More recently, we addressed this area on Wednesday, May 28th. Also note that as it turns out, this test of Nasdaq 1619 matched with the Dow's initial approach of the 9000 level -- the Dow touched an intraday high at 9003 Monday before backing well off its best levels by the close.
So at this point, the straight technical read is consistent with a consolidative near-term bias -- this could be more accurately characterized as 'a consolidative bias within the context of a broader uptrend.' Nonetheless, keep an eye on that Nasdaq 1619 area, as well as the Dow's response to the 9000 level. Both of these areas constitute what appear to be notable resistance points that carry longer-term implications.
Conventionally, you would expect a lengthier period of consolidation prior to a conclusive break of either level on a closing basis. For the record, we expect a longer consolidation phase in the present case as well. Yet if the indices would clear their respective levels on a closing basis, the immediate bias would once again favor additional upside.
Looking towards Tuesday, the identifiable catalysts are relatively limited -- the Economic Calendar is empty, and the Earnings Calendar carries very little of broad market interest as well. Note that on Wednesday, some analysts will be looking towards the ISM Services (Institute for Supply Management) -- a.k.a. the non-manufacturing ISM. While the services number is a nice point of interest, it's also less likely to trigger a broad-based market response the way those reports on Friday and Monday did. -- Mike Ashbaugh -- Briefing.com
1:02PM Diodes Inc reits Q2 guidance (DIOD) 18.88 +1.10: Co reiterates guidance for Q2 at its annual shareholder meeting. Co says it has seen no material impact from SARS on its business in Asia to-date, largely due to careful planning and procedures and increased use of teleconferences.
11:24AM Cabot Micro propelled by short-squeeze (CCMP) 51.51 +5.24:
9:59AM BofA on Semi Equip : In a note on semiconductor equipment makers, Banc of America Sec comments that AMAT, LRCX, NVLS, TSM could climb another 30%. Based on firm's estimation, KLAC (+0.7%) is the most extended stock on a valuation basis and will likely run into resistance in the $48 area.
9:30AM Hearing negative analyst chatter on INTC quarter 21.00 +0.18:
9:23AM Coherent revises Q3 guidance (COHR) 24.22: Following announcement that majority-owned subsidiary Lambda Physik AG was reducing its sales and EPS forecast, COHR now sees Q3 revenue "similar" to Q2 revenue of $103.5 mln. Reuters Research consensus is $108 mln.
9:15AM Entegris guides above consensus, now sees profit in Q3 (ENTG) 12.41: Company issues upside preannouncement for Q3 (May), sees net profit, vs Reuters Research consensus of breakeven, and expects revenue to exceed $67 mln, vs estimate of $60.8 mln.
9:13AM HP Compaq to include BRCM gigabit etherent controllers (BRCM) 24.51: The co announced its NeXtreme Gigabit Ethernet controllers will now be included as a standard component in HP Compaq's business desktop d330 and d530.
Advanced Micro (AMD) 6.87 -0.41: Banc of America downgraded to Sell from Neutral based on their belief that AMD's Q2 is tracking below expectations, and that the co will continue to face an uphill fight in its battle to gain, or even maintain, mkt share against INTC; cuts FY03-04 ests below consensus, and lowers target to $5 from $7.
Broadcom (BRCM) 24.03 -0.48: Legg Mason downgraded to Hold from Buy due to valuation; with the stock now trading at 4.6x CY03 price-to-sales vs peers at 5.6x, and at CY03 P/E of 61x vs peers at 39x, firm finds it increasingly difficult to make a case for aggressive purchase. BRCM announced its NeXtreme Gigabit Ethernet controllers will now be included as a standard component in HP Compaq's business desktop d330 and d530.
Infineon and STM : Lehman out of London upgraded Infineon (IFX 9.31, +0.35) to Overweight from Equal-Weight based on their belief that IFX is the least susceptible to dollar weakness within their European universe and that the stock's moderate valuation should make for limited downside in case of an industry-wide inventory build; also, low multiples and high operational leverage make shares a key recovery play in case there is no inventory-build and the sector moves into recovery. Firm downgraded Stmicroelectronics (STM 22.88, +0.07) to Equal-Weight from Overweight, saying STM's earnings are the most exposed to the US$ within their European universe, and the co requires significant forecast upgrades to drive the stock further given aggressive multiples.
Intel (INTC) 20.38 -0.44: Barron's article suggested INTC's recent stock price appreciation could be of concern given factors in Taiwan such as motherboard shipments dropping with very limited visibility. While Intel receives a very small portion of its revenues from motherboards, the co receives 80% of its sales from processors and related semiconductors which clip onto the motherboards. However, the co still maintains its forecast of $6.4-7.0 bln despite the recent concerns over declines in motherboard demand. The article describes the "gap" between INTC's expectations and motherboard manufactures and distributors large enough to drive a truck through. In addition, a Bear Stearns analyst predicts motherboard sales to be down 15% this quarter and suggests, "second quarter weakness is not priced into the stock". Intel reports its mid-quarter update this week.
Nam Tai Electronics (NTE) 31.90 -0.41: Announced that the co was elected as one of the contract manufacturers by Sony Computer to build the EyeToy USB Camera for the PlayStation 2. The Camera makes use of OmniVision (OVTI) chipset.
OmniVision (OVTI) 33.36 -2.53: DA Davidson downgraded to Neutral from Buy based on valuation; shares have appreciated about 117% since the co's Q3 earnings call on Feb 19, and are currently trading at 37.4x their FY04 earnings est, a premium to its peers. Target is $35.
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+BRCM+CCMP+COHR+DIOD+ENTG+IFX+INTC+KLAC+LLTC+LSCC+LSI+MOT+MU+MXIM+NSM+NTE+NVLS+OVTI+STM+TER+TXN+XLNX+^IXIC+^NDX+^SPX+^VIX+^VXN+^STI.N+^STI.O+SMH&d=t
RtS |
