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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Clint E. who wrote (33310)	7/9/2001 4:18:47 PM
From: j g cordes	Respond to of 69835

IBM Full Speed Ahead -- 3:00 PM EDT by Elyssa Jaffe Technology giant IBM [IBM:NYSE] captured an increased percentage of the application server software market in 2000, just behind BEA Systems [BEAS:Nasdaq], according to research firm International Data Corp. As of the end of the year, IBM captured 15% of the overall capital spent in the application software market. BEA Systems grabbed 18%, and Sun Microsystems [SUNW:Nasdaq] held onto 8%. Applications server software serves as an underlying base on which developers build their programs. Also known as middleware, the software acts as the piping that connects back office information stored on databases, mainframes, and other systems to the web. It can also enable different applications to work together. Corporations spent approximately $3.8bn on middleware in 2000. The market grew 128% from the year earlier, after posting a healthy 110% rise in 1999. Estimates call for the application server software market to grow to $11.8bn by 2005. IBM's latest entry in this market is its WebSphere Version 4 software package. The new software will be able to support web services, the ability for different companies and departments within the same company to share software via the Internet. The software was released last month. Business remains robust at IBM, despite its recent announcement of layoffs. While the company did lay off approximately 1% of its workforce, in effect the layoffs amounted to a reshuffling of its overall employee skill set rather than a needed reduction in overhead. In fact, the company plans to employ more workers at the end of the year than it does at this time. IBM is due to report Q2 results next week. We expect continued solid results. The current consensus is $1.16 per share, up from $0.98 reported in the Q1. With expectations that the trend will continue beyond this quarter, based on strong software sales and a pick-up in its services business, we continue to rate the shares a Buy. Market Timing From the Technical Desk: On June 25, we said: "We look for IBM [IBM: Nasdaq] to continue trading in the before-mentioned congestion area ($111-$120), although the current bias is for it to rise to $116, in the next one to two weeks, given that is has just tested support at $111." IBM hit our upside target of $116, but then turned lower. On July 6, shares lost support at $111 and look to test the April 18 up gap at $102 in one week. Shares are currently trading at $104.91. Risk Tolerance: *( Low risk, ***** High risk)