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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Mike M who wrote (65198)	12/25/2000 1:38:59 AM
From: Petrol	Read Replies (2) \| Respond to of 99985

Mike, Can you get any more vague? Of course some techs will rise in the years to come but many will only see lower lows. Getting specific then... which stocks are you buying and holding? Stickup

To: Mike M who wrote (65198)	12/25/2000 4:13:40 AM
From: DlphcOracl	Read Replies (1) \| Respond to of 99985

Mike M: I agree that "techs will rise again", but it will not be quickly or easily. I think they will appreciate between now and March; however, after that, they are facing: another quarter (Q2) of weak earnings or earnings misses, as the last of Greenspan's interest rate hikes works its way through the economy; and, the seasonally weak part of the year for techs, April through October. I am not a technician, but stocks cannot regain their footing after breaking all technical support until they form a stable base and, in the case of tech stocks, until their earnings begin to more accurately reflect their PE's. The lowering of interest rates will help in this regard, but will also take about six months to take effect in the US economy. I think that after October 2001, techs will be quite strong and will shine through March 2001. I would be VERY surprised if NASDAQ hit 4000 anytime in 2001 and would be quite pleased to see it finish next year at 3400-3500 level. Remember, that would be a 40% gain from current levels, quite a healthy rise. Absent any major shocks, NASDAQ may well cross the 4000 barrier in Spring 2001. I think we are in agreement regarding tech stocks, but may well have very different time frames. I would also be very cautious about buying the former tech favorites with astronomical valuations (PEG's well over 2 or PE's in the 300-500 range) such as JNPR, CIEN, BRCD, etc. They are franchise stocks, but any hint of an earnings disappoint or slowdown in their business will result in significant declines to their stock prices in the current environment. Some investors may well reap windfall profits buying them at these levels, but they are too risky for me.