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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (29440)	10/22/1999 7:43:00 AM
From: IQBAL LATIF	Respond to of 50167

View from trading ideas.. Shares of AOL made a strong recovery after morning weakness. This suggests that the stock has more to the upside. Its earnings beat consensus estimate by 2 cents. Company saw strong growth in all areas, especially in a quarter, which is seasonally weak. Now that AOL is heading into a strong period, positive momentum to carry the stock much higher from these levels. Shares closed slightly above the downtrend line, which is positive and it's a matter of time before the stock moves to around $130 on a near-term basis. Technical picture is looking good and sentiment is also positive, both could work in favor of the stock Shares of Intel and Micron technology fell in recent sessions on concern that higher DRAM prices could lead to lower consumption of memory and processors. Dell made an interesting comment when it pre-announced earnings shortfall by saying that the company would offer less memory per PC in order to deal with higher DRAM prices and allow consumers to pay for additional memory. If Dell cuts down buying DRAMs compared to previous quarters, it might hurt companies such as Micron and Intel. However, many analysts said that they've never seen a demand-related downturn and expects Micron to come out ok. However, they think that situation with Intel might not be all that clear. If unit demand declines, it could lead to a decrease in processor shipment and Intel is expected to cut prices on its Celeron, Pentium-III and even its newest chip, Coppermine, to deal with lower unit demand. This could put pressure on gross margin. Additionally, investors sold the stock after Merrill Lynch removed the stock from their "Top 10" list of tech stocks and added fast growing Xilinx Inx (XLNX) to that list. Analyst, Joseph Osha, was concerned that if DRAM prices remain high, which he expects would, Intel would have to cut prices that could limit its upside surprise. Texas Instruments (TXN) reported EPS of 44 cents, including acquisition-related charges compared to expectation of 43 cents. TXN earned 21 cents in the same period a year ago. Revenues rose 13 percent to $2.39 billion and operating margin widened to 19.9 percent from 9.6 percent. Company's profitability, to a large extent, was depended on its DSP business, which continued to grow at a healthy rate and TXN now owns almost 47% of the $4.4 billion market. Sales of semiconductor rose 26% and TXN expects demand for its chips to be above previous expectation in the fourth quarter, much of which is going to be used in the cellular phones. Demand for cellular phones worldwide is expected to remain high. While the stock fell after the earnings release, it has been a strong performer so far this year and analysts expect the stock to rebound after a brief pause. Investors ran for the cover at the open reacting negatively to IBM and AOL's earnings. Dow fell as much as 214 points and tested support at 10,200 twice on an intra-day basis before rebounding off that level. Investors were decidedly bearish on IBM, but were much more upbeat on AOL after reacting negatively at the beginning. By the end, AOL closed with a healthy gain of 4 ¬ to 122 ¬. Long bond yield continued to hover around 6.35% and did not offer any relief to stocks. As for Dow, the index showed strength going into the close, which was positive. Things could have been nasty, but bulls made sure that that didn't happen. This suggests that Dow might try to stabilize over the next few days before making another run at overhead resistance at 10,400. In the meantime, Dow's current trading range remains 10,200 - 10,400. If Dow can stay above 10,200 for a day or two, odds of a decent rebound would be high, which could carry the index up to around 10,600. Technology stocks had a good day by the end, as NASDAQ closed on the plus side by 13.82. IBM and AOL dragged tech stocks lower, but as AOL recovered after early weakness, traders quickly moved back into Internet stocks. The large-cap Internet stocks held up well and are showing better relative strength. As for NASDAQ, the index is in the midst of testing overhead resistance at 2800 and a decisive close through this level would be positive. NASDAQ closed right at its 25-day moving average and a close through current level would project a target of 2875. <<Go TXN EMC if we hold these supports and see a good rebound... my addition>>