From Briefing.com
Updated for 06-Apr-99
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General Commentary:
This time is different... Over the past couple of months the sector/market has
had several big one-day rallies... But in almost each case there was no follow
through buying... Within days the market would give back its gains and return to
its relatively tight trading range... No longer... Briefing.com expects Monday's
broad-based advance to be the beginning of a moderately strong upside push
with a much-needed increase in participation... The reasons for our optimism:
Earnings warning season coming to a close, with actual numbers set to
start rolling in next week... Traders preparing for typical "sell the rumor,
buy the fact" rebound.
PC sector showing signs of life... As we have been predicting on this
page over past few weeks, anxiety over sector slowdown was
exaggerated - as problems more seasonal than permanent.
Many of the second and third tier companies have already experienced
"bear" move, falling by as much as 30%-40% from 52-wk highs... As
such there are a number of relatively attractive long-term plays for value
oriented investors.
Momentum and bullish psychology in Net sector is contagious.
Plenty of cash on sidelines (bolstered in part by tax returns).
We doubt seriously that the current advance will match the historic Oct-Jan run,
but gains should be relatively impressive... One factor limiting the upside is
extreme values and overextended technical tone of sector leaders... At some
point these stocks will have to correct and when they do it will be tough for rest
of the players to pick up the slack... That said, the short-term outlook looks much
improved following Monday's record-setting jump.
Yahoo! (YHOO) and Advanced Micro Devices (AMD) are due to report
results after Wednesday's close... For consensus estimates, actuals, year-ago
results and percent change in revenues, see Briefing.com's Earnings Calendar.
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