Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: DOUG H who wrote (8098)	3/29/2000 10:41:00 PM
From: SJS	Respond to of 24042

Briefing.com's nitely tech message addresses this, and makes good sense otherwise. ____________ The volume picked up Wednesday, but the results remained very much the same as the tech sector struggled throughout the session, plagued by a tendency among traders to use signs of strength as a selling opportunity. That was particularly evident in the closing stages when the Nasdaq cut a 183 point loss down to 99 points and then promptly gave back another 100 points in the final 35 minutes of trading, closing a mere 3 points off its worst levels of the day. The selling was broad-based and centered around most of those groups that have led the technology rally-- chip, chip equipment, telecom equipment, biotech, and Internet. The latter sector came under added pressure after Templeton fund manager, Mark Mobius, said he could see a major meltdown coming in the Internet stocks with some falling as much as 90%. It's not like Mobius is the first person to make such a bearish proclamation. Nevertheless, his caustic remarks fit so well with Abby Joseph Cohen's statement from Tuesday that they received plenty of mention from the media as being a sure sign sentiment toward the tech sector had turned bearish. That's a stretch in our opinion. We would admit that traders are exercising more caution at a time that is typically known more for earnings warnings than actual earnings announcements. Accordingly, they are looking to protect some large profits before the end of the quarter, and in some cases, are beginning to raise cash to pay tax bills. In a sense, the tech stocks are also being hurt by the window dressing dynamic that was expected to help them. Rather than opting to have a large number of highflying tech stocks in their portfolio, we suspect some fund managers are angling now to show that they are exercising some prudence at this stage of the game and that they have positions in the less volatile, and more value-oriented blue chip issues. Hence, the sector rotation that was at work in Wednesday's session that benefitted the drug, retail, and oil issues in particular. This dynamic could persist over the near-term, but once earnings season rolls around we expect the tech sector will re-assert itself in a leadership position as investors get another reminder of the disparity in growth rates for old economy and new economy companies.