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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (2835)	12/12/1999 12:09:00 PM
From: Guy Gordon	Read Replies (1) \| Respond to of 24042

FWIW, here are two charts of JDSU. 1-year: white-crane.com short term: white-crane.com TA: For the year Nov 1998 through Oct 1999, JDSU was on the blue trendline I drew (pretty much defined by the 50-day Moving Average.) The red line is an attempt to define a trading channel. I don't put too much faith in it, since JDSU only touched it once in that year. In October, right around earnings, JDSU moved into a new, steeper channel. That run-up took the stock from 120 to 270 in five weeks. For the last two weeks, JDSU has moved sideways, and is now finally approaching its 26-day MA. The question is will JDSU turn up again when it reaches the 26-day MA? Or will it extend the current short-term channel? Or will it break down? I'm betting on the middle possibility. I think that JDSU is going to hold it's current level, and continue climbing at the rate it did for the past year. In other words, it will form a new channel on top of the old one. Let me show you an example of this happening. Here is Cisco: white-crane.com Notice what happened in October 1998. After the Asian Financial Crisis, CSCO entered a steep climb that took it out the top of its old channel. After climbing four months, it settled into a new channel that rested on the old long-term channel, and rose at the same rate. (Then in Oct 99, it started up again.) Here's another example from Qualcomm: white-crane.com Again, the stock was in a long-term channel until Nov 99. Then it made a quick sprint through the top of that channel, and now seems to be settling down into a new channel on top of the old one. What this means, for all three stocks, is quite simple. There has been no change to the fundamentals -- so the growth rate expectations remain the same. That's why the new channels are rising at the same rate as the old channels. What has changed is the level of valuation. All three of these companies have gotten exposure to a broad base of new investors, who have bid up the stock price. Suddenly, in October, the financial press discovered optics & telecommunications. One wonders what took them so long. That's what caused the "whoosh" in October. Don't expect it to continue. The Press doesn't have that long an attention span. What will continue is the long-term growth of these companies.