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To: Venkie who wrote (7371)	4/30/2002 12:04:11 AM
From: stockman_scott	Read Replies (1) \| Respond to of 13815

An Update From Briefing.com: Nasdaq new lows overtook new highs today by a 199-to-122 margin. More alarming, at least as it pertains to this page, is that big-cap tech dominated the new low list. WorldCom (WCOM -28%), Verisign (VRSN -18%), JDS Uniphase (JDSU -7%), Qualcomm (QCOM -4.6%), Amgen (AMGN -3.6%), Ciena (CIEN -3.6%), Check Point Software (CHKP -5.4%) were among the larger-cap technology stocks to roll over to fresh lows today. On the Big Board, AOL Time Warner (AOL -3.6%), Qwest (Q -14%) and Alltel (AT -4%) were some of the names finding themselves caught in the technology/telecom massacre. As I have noted in recent Trader's Edge briefs, the stocks/sectors with the most exposure in this market are the ones that have demonstrated relative strength over the past 12-18 months. Certainly, the vast majority of technology stocks have come undone over this time, some simply have been more resilient than others. Examples of relative strength have included biotech, security software, storage, telecom services. After moving into these groups for visibility and liquidity reasons, investors finding that these sectors are no longer immune to the type of panic selling capable of devastating a market capitalization by 20% or more in a single day. Currently, short-sellers are having a field day in large-cap tech. Because of the alluring valuations presented by names such as AOL (16x yr-forward earnings) and QCOM (26x yr-forward earnings), there is very little short interest to be found in these names. Given the enormous floats and unusually low levels of short activity in these names, bears have been able to chase a breakdown in these types of stocks with little fear of being trampled by a squeeze. However, after several days of extremely aggressive selling, may finally be on the verge of a capitulatory bounce. In this trader's opinion, the way to position to the longside in large-cap tech is to catch them on a successful intraday test of support. Problem is that with so many stocks breaking to levels not seen in 1, 3, or even 5 years, there are very few levels on the charts to rely on. Traders unwilling to step into an equity that lacks a defined level of risk (which I am one of) will be required to buy stocks on retests of their recent lows. This strategy requires the discipline to watch a stock reverse out of its downtrend and undergo another round of defensive action, before stepping in to pull the trigger.