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Technology Stocks : Mattson Technology -- Ignore unavailable to you. Want to Upgrade?

To: lrrp who wrote (3232)	12/23/2000 11:25:39 AM
From: Philip W. Dunton, Jr	Read Replies (1) \| Respond to of 3661

Steve, My opinion on all of this (which I am giving only because John Stewart asked for it) is purely technical and you should realize that some unexpected fundamental event, like the devastating earthquake in Taiwan in 1999 or a bad earnings report by MTSN, could override the technicals of the MTSN chart. I liquidated my major position in the 40's last May when I saw the chart was rolling over and MTSN looked like it was putting in a major top. I announced to this thread and also on Yahoo that MTSN had completed a very bearish head and shoulders formation when it penetrated the neckline on the downside on high volume at the 28 level. At that time, I mentioned that the next support for MTSN on the chart was 15 and there was more meaningful support at 10-12 and 7-8 levels. I did purchase a much smaller position at 15 for a technical bounce because I thought it had a shot at going back to the mid-twenties. Soon thereafter, I sold it too early at 21 as it went on to about 24. I then repurchased at 12 and ended up with less than a point gain on those shares. I then concluded that the upside was getting more difficult to play because MTSN had lost its ability to rally, so I decided to leave it alone until a base formed. Why am I buying now? Here's why: (1)I believe this down leg (the second leg) of the NAZZ bear is essentially over. My sentiment indicators show that sufficient bearishness has build up in the tech sector to support a tradeable intermediate rally. (2) The chip equipment sector looks sold out for the moment, even though fundamentals seem to be deteriorating, hence, a lot of the bad news is price in (3) MTSN's chart looks like it is trying to put in a bottom at the 10 level. It's had plenty of opportunity to spike to 7 in the past couple of weeks but it doesn't seem to want to visit that area at this time. The recent move this past week under 9 (where I started buying) was on lower volume than the move under 9 in mid October and the Oct low held, which I view as a positive test. (4) As MTSN has been basing, the volume has been drying up, which is also positive. (5) It doesn't pay to be on the wrong side of the fed and the fed is going to loosen. (6) And finally, a major uncertainty that I believe has weighed heavily on MTSN's shares is being remove next month, the consummation of the merger. In conclusion, MTSN doesn't seem to want to go lower right now, it looks sold out to me. First resistance is at 12 where the 50 day MA is. If it can get through 12, it would have a decent shot at 15 and if the rally really had some legs, high teens might be possible. Please bear two things in mind, (I) I could be wrong but even if I am, MTSN is at a very depressed level so the downside isn't greater than perhaps 3 points and (II) I view this only at a TRADING opportunity which might last 3 or 4 months. I still believe there might be another down leg to this bear when investors figure out that the fed's rate cutting isn't working and we are in a nasty recession. I think there is a fair chance of this because the real problem is that there is a bubble (over-extension) of consumer and corporate debt in this country which needs to be worked off and that will take alot of time, not lower rates. To play this rally, I have also bought the QQQ and several of the more prominent (high beta) names in the chip and chip equipment sector. Actually, I believe an AMAT will do better than a MTSN in this rally, but the percentage move in MTSN could be rewarding. Being nimble is the way to play it because this market still has plenty of minefields left. Good luck. Phil