DLIA with next resistance at 15 is extremely oversold, even next to a lot of other stocks. There seems to be very little downside, but I'd still wait to enter on the off chance that the downside can continue for another 5% or more. I must say that I got the feeling that Barron's was actually 'gloating' on the damage their article did to the nasdaq. Still remember the more oversold everything is, the more it will rebound. I'm satisfied going into mostly cash every evening. There are spikes of breakouts throughout the market, you just have to be patient and go with the flow. Don't insist on picking up CMGI or EGRP just because the news seems good for the near future, get the companies that have good news right now. There will be ample time to pick up the others.
(((((((((((((((((((((((((((((((((((((((((((((((((())))))))))))))))))))
Article reprinted courtesy of Barron's On Line Edition for June 1.
Dow Gains, But Amazon Bomb Levels Nasdaq
By Howard J. Godfrey
After having been down by as much as 150 points during the day, the Dow Jones Industrial Average recovered within the last half hour of trading to finish up 36.52 and close at 10596.26.
But the tech-heavy Nasdaq Composite Index plunged 58.48, or 2.37 %, to 2412.04. The freefall was lead by Amazon.com -- which was the focus of a negative Barron's cover story, "Amazon.bomb." On April 27, Amazon was trading at its 52-week high of 221 1/4 and has seen its stock lose over half its value within the last month.. It fell another 12 15/16 points Monday to close at 105 13/16. Other Internet stocks tumbled, too: America Online fell 6 1/4 to 113 1/8 and Yahoo lost 9 13/16 to 138 3/16.
The S&P 500 index also fell 7.58 Monday to 1,294.26 as declining issues on the New York Stock Exchange outpaced gainers by more than a ten-to-nine margin: 1,658 stocks were down, 1,422 were up and 544 closed unchanged.
Continued concerns over inflation, which have spurred profit taking over the past two weeks, contributed to the market's early decline. The Dow reacted negatively to a report from the National Association of Purchasing Management, which indicated that the nation's industrial economy expanded for a fourth straight month in May. Traders had expected the report to indicate that the economy was not overheating. Instead, the report, which showed strong price rises in raw materials for the first time in 16 months, sent stocks skidding.
In late trading, the yield on the 30-year Treasury bond, which moves in the opposite direction from its price, rose to 5.93% from 5.83% on Friday. Prices on the benchmark bond lost 1 7/32 on the day.
Amazon.com was the fodder for much talk on Internet bulletin and message boards over the long holiday weekend. The article said that several analyses have indicated that Amazon.com stock is worth less than $10 a share. Investors also are beginning to wonder how the company will meet the challenge of new competitors and when it will finally make a profit -- especially when it's adding new warehouses just like the old "bricks-and-mortar" retailers. In Monday's trading Amazon.com fell 12 15/16 to 105 13/16.
Another Barron's feature, "Can Alcan?," noted that the aluminum producer, which is the Avis to Alcoa's Hertz (Alcoa is the world's largest aluminum maker), has instituted a series of cost-cutting and revenue-enhancing initiatives that should allow it to improve its "economic value added" dramatically by 2001. Alcan's stock rose 2 to 30.
A Barron's article, "Still on the Runway," profiled Lockheed Martin, which in recent years has tried to recover from "nosedive after nosedive" -- including product flops, foreign bribery scandal, slumps in defense spending and a costly failed attempt to enter the commercial jetliner market. Lockheed has seen its stock decline to around 34 recently, about 40% below its 52-week high, as a result of missile-launch failures, a slowdown in the commercial-satellite launch business and lagging orders for its cargo planes.
But Lockheed, the article argues, also has proved resilient in the face of problems, and is poised to make another comeback. A Lockheed Martin-built satellite was recently put in orbit, and the company won a contact, worth a potential $117 million, to design and deliver new launch-control systems for Tomahawk cruise missiles. The stock is not expected to recover fully until the fourth quarter, but it did gain 1 5/8 Monday to close at 41 1/16.
Other stocks mentioned in this week's Barron's: Ennis Business Forms edged up 5/16 to 8 15/16; Penske Motorsports gained 1/2 to 49 ½, and TeleBanc Financial rose 8 to 74 1/2.
|
