Hi G,
I'm not touting my Guru status regarding past calls either.ERG
I am simply stating my honest interpretaion of what constantly seems to be market noise.This noise most often puts one's emotions down a dangerous path of being 180 off the right long term move.
stockcharts.com[w,a]daclyyay[pc50!c200!f][vc60][iUb5!Ul14]&pref=G
The RSI doesn't look to me like a distribution top.Since Amat's recent top in November @ 25.94 we've seen failed new highs in January @ 24.75 and 24.00 in February.These failed new highs do not tease new investors to buy.They are more grinding and abrasive.This action to me appears to be more a wearing out, dismaying kind of price action.
All along this long term poor price action ,Amat's 200 moving average has been on the increase.
Just yesterday both Amat and Intc have hit their 200 day moving averages.These are huge magnets for institutions to jump in and provide buying support.Yesterday's NAZ volume was down most of the day and picked up as the selloff progressed in the afternoon.By the close the Naz volume was up 4%.You don't think brokers would tell customers to sell at the 200 just so they could esily buy up the discount?? DO YOU!!
With ADX flatlining and oversold and RSI also very depressed,it is hard for me to think we're at an Abyss about to fall off.
It seems to me we've already endured the negative grind since November?
My bet is these brokers calling for a selloff out of tech are doing the buying at the 200!This is a classic spot where institutional support MUST come in.
When institutional support comes in, it will bolster the price as it marginally violates the 200 line.If it was institutional selling out - believe me we'd see more than a 4% increase in volume over its 50 day (volume) moving average.
Heck I've been wrong plenty times before and I could be way off now.It is just counter to my belief in persistence of a long term investor to be selling out here,as we test the 200 ma line with revenues increasing and backlog/Capex picking up for the first time in 3 years.
Past cycles have regenerated demand in shorter time periods than 3 years.The over capacity expansion of 99-00 was larger and thus the protracted delay/lag in reinvestment.
That being said WiFI's are hot,phones now take pictures,flat panels are now getting cheap,more people buy the more expensive laptops than desk tops and in general our world uses more chips.
One thing for sure - equipment still wears out - there is at least a general replacement mode that must be addressed.Not to mention Capex expansion being driven by a wider array of products.
IBD has a great article about Advantest - USA.Advantest is the largets global producer of both chip testhandlers and testers.They are on a ficsal years closing the 03 year this March.The CEO says orders are up 97% 03 vs 02 and they will achieve net income growth of 10 in 03(ending this month).
They are putting new emphasis on foundry and chip testing.Their president quit this last January - I'm hopeful Cohu has made inroads into what was once their exclusive testhandler territory.The fact that their president quit and they are "beefing up their slaes efforts in foundry and test customers" sounds like Cohu's shipment of Edge testhandlers is getting their attention.
I've long speculated that this was Cohu's recent emphasis in their R&D.They own pick and place and for years have aimed at DRAM testing - never to be able to make inroads.Last quarter they shipped a record number of testhandlers at lower than historic margins - I think they are butting into Advantest's normal market.
If right it provides a great opportunity - and I'll get off my soap box.GG
Buy the 200 upon minor violations - give it at least 3 -4 days of time, and then have a close stop loss.
This is a wealth defining moment and it will take courage to prevail.
Buy the Dip and Hold with Confidence - this sector's dominance will once again proves itself to be inevitably an exponential growth machine that will build and create wealth.
JMHO
Bob
TI has good vision on cell phone sales and this Thursday (after hours) Oracle announces earnings.
Intels #'s where significantly up year over year and price tanked because the mid range of the vision was lowered and yet left the top there.
Our unemplyment went up 21,000 people and it wasn't good enough - yet gradual improvement was the underlyingtrend and the market tanked on the "BAD NEWS" of more people finding employment.
Ther's a lot of spin out there and if ones not careful it can screw up your thinking.
Must be an election year - we're getting very critical of what can only be considered good news - NO??
Thanks for your unbiassed questioniing of my thoughts and the support that give.
Bob |
