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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Ron Pratt who wrote (117305)	11/25/2000 2:23:50 PM
From: Jenna	Read Replies (2) \| Respond to of 120523

Suggestion..to get back into the long fray I would pick up shares of some of the tech belwhethers and short only with option puts those companies that will inevitably be one day wonders and not continue to move up if a rally ensues. It is much less outlay of money and you have a hedge on the short side as well. Earnings are coming out this week for a handful of companies that might translate into some good gains if there is indeed a rally. They will posted on the watch list for Monday. A continual rise might be expected in the 'finer' pharmaceutical and biotechs like TECH, IMPH, ALXN (69 big blocks), VRTX which were double digit gainers on Friday and are so oversold as to be possible contenders for possible swing trades. However we cannot put the economic problems on a back burner. Earnings are down and decreasing, earnings warnings will come at the same time as the supposed "January Effect".. and who will dominate? We have no way of knowing. When Analysts lower estimates to meet lowered earnings we are still faced with technology stocks that have lessened growth no matter how you lower the "marking curve" to change the class average. When earnings estimates drop from 25% to 15% and price estimates are 'slashed' there is something to be said for how that will effect January's prices in the technology sector. Lowering estimates do not hide the immutable fact of decreased growth. Investors are not going to buy 'tech bargains' in December any more than retail sales of 50% - 60% brought in actual sales increase in the retail sector. I would still be in favor of rotating trading capital into a favored sector and shorting the sector that falls out of disfavor as so many inevitably will. Are we being intoxicated with holiday cheer? Will buying techs be tantamount to shoppers running up credit card bills and figuring they'll be paying the piper for extravances in the next few months? There are still quite a few companies with P/E ratios that are jokes especially when compared to companies like CSCO, DELL, GTW, INTC etc. We should never become so complacent as to think we have turned a corner for more than a 'remission'.. and there is still an inherent problem in the economy that is virulent and ongoing and not likely to dissipate because Christmas lights are really looking beautiful throughout malls and and homes. After the holidays, lights are taken down and thats when the bills start coming in. You can stay lightly invested in technology bellwhethers with the occasional daytrade foray into some blimps by all means. But this market is not a shopper's emporium just yet.