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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (4595)	8/3/1999 1:38:00 PM
From: Teflon	Respond to of 54805

Just to "round" out my point, Frank, I wanted to share with you some of my thoughts. One of the things that has bothered me about MSFT and the Markets over the past few months has been the divergence of MSFT from the NASDAQ Comp, when looking at percentage performance since the beginning of April. As MSFT entered earnings season and the split of its stock, the trading pattern of MSFT turned towards a corrective period that has evidenced itself almost every year without fail. This year the consolidation of MSFT lasted three full months, and over that period the NASDAQ Comp started to outperform the stock. Please see the graph per the following link: techstocks.com My opinion is that this trading pattern in the NASDAQ and MSFT has to correct itself before the Market can turn higher. MSFT (as well as some other key tech bellweathers) must regain its leadership with respect to the Index for a sustained run to be made by the tech sector. This is why I believe the current correction in the Market is healthy. Notice that a retreat by the NASDAQ while MSFT shows strength is one of the ways that this graph will return to historically predictable trading patterns. To me this is a good thing. At some point, MSFT must catch up to the NASDAQ either by the Comp pulling back to MSFT or MSFT making a strong move up to catch the comp. The former procedure, IMHO, is the ideal scenario as it will provide better sustained strength over the long term. When these two patterns converge, I believe the NASDAQ and MSFT will both be better prepared for a return move to positive territory. Teflon