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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (5425)	2/11/2001 1:25:02 PM
From: Paul Viapiano	Respond to of 6531

I wish I had time to respond to the last several posts and the questions posed by Fred in his "what-if" queries, but one thing needs to be stated. Whether trading or investing, low price risk correlates to high information risk and vice-versa...in other words, when a stock has fallen we have less price risk but usually at the same time we don't know a lot about the future (high information risk)...when enough is finally known about the future the stock has usually priced that in and is no longer the bargain it was earlier. By the time we find out if BRCM will indeed end up having a good 2001 and hit the numbers, it will be too late to buy at these levels...right now the uncertainty is what is priced in and hence we are floating in this $80 limbo. But remember that BRCM is not trading in this manner all alone in the market. This inventory correction is not a company specific problem, it is an industry-wide problem, and if it indeed lasts for only 2 quarters we should see an augmentation of expectations across the board. As for the Nasdaq in particular, I'd like to point out an important technical divergence that I am seeing. New 52 week lows being made here are much less than they were the last time the Nasdaq was at this level and downtrending. This has almost always been a sign that market tone is getting better because it speaks to the Naz market as a whole and not just the index. We are also getting very close to oversold on a cumulative adv/dec line basis, which may reach it's crescendo in a test of the January lows. So as you can see, several factors are converging at once in a very short time frame...we cannot know which scenario plays out but we can interpret the market's language and be prepared for the outcome.