From Briefing.com: 5:30PM After Hours Monday : A slightly weaker bias is evident in after hours trade amid limited action. The S&P futures, currently at 930.20 is trading 2.80 points below fair value, the Nasdaq 100 futures, currently at 1124 is trading 4 points below fair value while the Nasdaq 100 AHI is down 2.55 points.
On the defensive in after hours trade is Tech Data (TECD -7.4%). The company reported in line EPS for Q3 but was light on the top line ($3.81 bln vs $3.93 bln consensus). For Q4 now expects earnings in a range of $0.53 to $0.58 per diluted share vs the Multex consensus estimate is for earnings of $0.64 per share.
Also firmly lower is Semtech (SMTC -12.1%) which beat the EPS consensus for Q3 by $0.03. However, the company reported below the consensus for revenue ($47.2 mln vs $50.2 mln) and said now looking for Q4 net sales of $43.0 mln to $45.0 mln vs the Multex consensus estimate of $52.3 mln. Competitors include: TXN, NSM, LLTC and MXIM.
In the plus column is OmniVision (00C0 +3.1%) after it announced that it is supplying custom VGA CameraChip modules in high volumes to Motorola PCS through Asian contract manufacturers. Higher after a stronger earnings report is Alloy Inc (ALOY +1.1%). The company beat the EPS consensus by $0.13 with revenue at $93.2 mln vs $83.0 mln consensus. Firm guided Q4 revenue to a range of $94-$98 mln vs the consensus estimate of $92.8 mln.
In other news Advanced Micro (AMD close 7.95) announced the closing of its public offering of $402.5 million aggregate principal amount of 4.50% convertible senior notes due 2007 convertible into the company's common stock at an initial conversion price of $7.37 per share. For more detail on these, and other developments, be sure to visit Briefing.com's In Play, Earnings Calendar, and Guidance pages -- Jim Schroeder, Briefing.com
Close Dow +44.56 at 8849.40, S&P +2.34 at 932.89, Nasdaq +13.23 at 1481.97: The Dow has finished higher for seven, consecutive weeks, and if things continue to go the way they did today, it will be eight, consecutive weeks when the closing bell rings on Friday... Once again, the blue chip average traded with a generally bullish bias, but so did the rest of the market, which was bolstered by a resilient technology sector...
The latter was driven by the white-hot semiconductor group and turned in another winning performance despite valuation concerns that were piqued by a UBS Warburg downgrade of Cisco (CSCO 14.89 unch) and a Bernstein downgrade of Intel (INTC 20.48 +0.43)... Offsetting those concerns, though, was a positive piece on Cisco in this week's edition of Barron's and a prediction from the CEO of National Semiconductor (NSM 19.64 +0.82) that a turn in the semiconductor industry would happen before the end of June... Lending an added measure of support to today's proceedings was a better than expected existing home sales report for October that confirmed the notion that the housing sector remains strong and that the economy is not likely to suffer a double-dip recession...
Fittingly, homebuilders, and a number of other economically-sensitive groups, like paper, auto, transportation, retail, and steel, drew some added buying interest that underpinned the averages and more than offset the weakness in the managed care group... SG Cowen was the main contributor to the weakness in the managed care stocks as that firm downgraded the sector to Market Perform from Strong Buy after conducting a pricing survey that left it concluding 2003 will be more challenging than previously thought with less opportunity for EPS upside...
Overall, the tech sector was the standout performer on the day as its resilience in the face of morning selling efforts prompted a renewed round of buying interest in the afternoon session that saw the market finish on an upbeat note... The same can't be said for the Treasury market, which languished throughout the day near unchanged levels as the resilience of the stock market and the better than expected economic data detracted from buying interest... Separately, we suspect the equity market also drew a dose of support from the recognition that the Wednesday to Monday period around Thanksgiving has seen net gains in the Dow in all but three years since 1987...
As for the Dow today, it was led by IBM (IBM 86.20 +1.77), Merck (MRK 60.31 +1.28), United Technologies (UTX 64.81 +1.19) and General Motors (GM 38.70 +1.12)... Volume was relatively heavy, particularly at the Nasdaq where 1.94 bln shares were traded... Tomorrow, look for the market to key off the combination of the Q3 GDP, the Consumer Confidence report for November, and New Home Sales data for October...Nasdaq 100 +1.0%, Russell 2000 +1.2%, SOX +3.2%, S&P Midcap 400 +0.6%, NYSE Adv/Dec 1857/1421, Nasdaq Adv/Dec 1953/1454
6:14PM Credence sells subsidiary (CMOS) 11.80 +0.69: Company announces sale of its subsidiary, Dimensions Consulting Inc.; financial terms were not disclosed; CMOS will recognize a charge of approximately $5.1 mln in Q4 of 2002 for impaired intangible assets associated with this subsidiary.
5:03PM Advanced Micro announces closing of $402.5 mln in convertible notes (AMD) 7.95 +1.09: -- Update -- Announces the closing of its public offering of $402.5 million aggregate principal amount of 4.50% convertible senior notes due 2007 convertible into the company's common stock, which included the exercise in full of the underwriters' over-allotment option. The notes are convertible into the company's common stock at an initial conversion price of $7.37 per share.
4:41PM Semtech tops estimates; guides lower (SMTC) 18.11 +1.62: Reports Q3 (Oct) earnings of $0.17 per share, $0.03 better than the Multex consensus of $0.14; revenues rose 8.0% year/year to $47.2 mln vs the $50.2 mln consensus; estimates that net sales for the fourth quarter of fiscal year 2003 will be in the range of $43.0 to $45.0 million -- Multex consensus estimate is for revs of $52.3 mln.
3:01PM Nasdaq Composite short term levels : -- Technical -- The methodical march higher off the midday lows continues as we head into the final hour of action. Continued posture above 1474/1472 suggests potential for another run at resistance highlighted this morning (1486/1490). Secondary level is at 1500 (200 day sma/psych barrier).
2:54PM Relative Strength -- Flextronics (FLEX) 11.70 +0.55: Shares of Flextronics have returned 23.5% since we reviewed them favorably on Friday, November 15th -- just six trading days ago. By way of comparison, the S&P 500 is roughly 2.3% higher over the same time frame, while the Nasdaq has returned about 4.0%. So while the six-day, 23.5% return is strong on a stand-alone basis, it's also worth noting that Flextronics shares have outperformed on a relative basis as well.
The company operates in the Electronics Manufacturing Services (EMS) sector which is generally viewed as a cyclical group within the broader technology space. In a nutshell, the EMS companies do manufacturing work that original equipment manufacturers (OEM's) opt not to perform themselves. As a consequence, the EMS sector is commonly viewed as a leading indicator of the state of technology in a broader sense. The general thought being that if business is picking up for the EMS companies, then OEM's such as Cisco Systems (CSCO), Dell Computer (DELL) and Hewlett-Packard (HPQ) must be anticipating a turn in demand as well.
As we noted in our prior review, Flextronics has a particular competitive advantage in its size. The company offers a vertically integrated solution which can be packaged extremely well for the large-scale deals. Put another way, once end market demand does pick up, the company is well positioned to capitalize. At that point, the company will reap the benefits of stronger revenues and stronger margins which could make current projections appear conservative.
In our initial review, we were favorable on Flextronics largely due to the way its chart was shaping up. At the time, this was our assessment of the near-term outlook -- 'While the current picture looks reasonably favorable as it is, those with a more cautious approach may want to watch for a close over 10.00 to 10.20 on higher than average daily volume to enter the stock. This will represent a clean break of resistance with a near-term price target around its 200-day simple moving average.'
So largely on the basis of its favorable technicals, we set 'a near-term price target around its 200-day simple moving average.' Well, as you can see in the chart above, today appears to be the day for the test of this important technical level. Flextronics' 200-day moving average currently rests at 11.30, and the shares have edged comfortably above this level on an intraday basis.
Also note that the break above former resistance in the range of 10.00 to 10.20 has come on much stronger than average relative volume. This was the signal we were looking for in our prior review and continues to serve as a bullish intermediate-term indicator. While the shares are certainly due to consolidate following a six-day, 23.5% return, look for a longer-term target at former support around 12.50. To the downside, watch for initial support now at its 200-day simple moving average, followed by a more significant floor at straight-line support of 10.20. -- Mike Ashbaugh, Briefing.com
12:28PM Sector Watch: Semiconductor : SOX index (at 367 +1.2%) still clinging to a bullish bias but has slipped off the early high. Strongest performers today include: AMD +9%, ALTR +5.2%, NVLS +3.2%, LLTC +1.9%. Weakest link is BRCM (-4.3%). For the very short term need to see a push through 369 and 371 to suggest current pullback will be short lived. Failure exposes 362/360 with the next barrier of interest at 355. Initial resistance for Semi HOLDRS at 29.23 with support at 28.40 and 28.23.
11:19AM Intel (INTC) 20.26 +0.21: Bernstein downgrades from Outperform to MKT PERFORM, price target $21, thinks potential Q402 good news is discounted and peak valuation is stretched.
9:46AM Broadcom cut to Hold at Legg Mason (BRCM) 20.29 -0.34: -- Update -- In a pre-market note, Legg Mason downgrades to HOLD from Buy. Firm cited recent run in price.
9:37AM Broadcom says cost reduction program on track (BRCM) 20.76 +0.12:
8:56AM Advanced Micro upgraded to Mkt Outperform at JMP Securities (AMD) 6.86:
8:35AM Dupont Photomask downgraded at Needham (DPMI) 28.16: Needham downgrades to Hold from Buy based on valuation; in addition, firm believes that DPMI may encounter constraints on its cash as its faces a threefold challenge of maturing debt, capital investment needs, and poor profitability; at the same time, the high cost of leading edge photomasks combined with growing costs of leading edge designs may be slowing the growth of leading edge design starts. Price target is $26.
8:21AM Intel cut to Mkt Perform from Outperform at Bernstein -- valuation (INTC) 20.05: -- Update --
8:18AM SNDK pre-market weakness said to be tied to Off Wall Street note : SanDisk (SNDK 26.60) shares trading 4% lower in pre-market. Hearing trading floor rumor that weakness is tied to an Off Wall Street research note. Briefing.com has not seen the rumored note.
8:06AM National Semi reiterates Q2 outlook, says industry to recover by June (NSM) 18.82: Chairman Brian Halla today reiterated his Q2 rev guidance of flat-to-down 5% sequential growth as well as his forecast of an industry recovery before the end of June; Halla says that demand for electronic gadgets is expected to pick up in the U.S. and that investor confidence is returning.
7:49AM Intel to hike flash memory prices 20-40% -- Digitimes (INTC) 20.05: Digitimes reports that Intel plans to hike flash memory prices an estimated 20-40% starting Jan 1, which reflects its positive outlook on the non-volatile memory market next year and may prompt price increases from other suppliers, said World Peace Industrial, a Taiwanese distributor of Intel CPUs.
7:04AM Cisco Systems cut to Hold at UBS on valuation (CSCO) 14.89: UBS downgrades to HOLD from Buy after stock exceeds firm's $14.50 price target. While firm sees upside in the $16-$17 range based on CY04 earnings power, UBS does not believe stock will trade off CY04 estimates until there is conviction on co's seasonally challenged AprQ.
9:44AM Technical Levels : When we reviewed the Nasdaq on Friday, November 22nd, we were looking for consolidation following the markets' huge gains Thursday. As it turns out, the index did indeed trade reasonably flat, putting together a modest one-point gain on notably strong volume. On an intraday basis, note that the Nasdaq topped out at 1,375 which happened to match up relatively well with our first resistance at 1,373. It's also worth noting that the index bottomed on an intraday basis Friday at 1,349 which fit within our initial target range of 1,348 to 1,352.
Now with a one-point gain Friday, it may not surprise you that the straight technical picture hasn't changed substantially. Yet it is worth noting that Friday's price action remained relatively bullish. The Nasdaq's opening levels approximated its worst levels of the day, while the index closed in the upper quarter of its intraday range. Again, the bullish intraday price activity came on nearly two billion total shares traded -- particularly strong for a Friday.
So all in all, the underlying strength in the market remains significant, and the broader bias very clearly favors additional upside. The only real question is how deep, and how long, any period of consolidation might need to be -- if any consolidation is required at all. Once again, our intermediate-term target remains in the range of 1,500 to 1,520. This area encompasses three different notable technical levels: 1) it approximates a swing target off the Nasdaq's recent consolidation, 2) it matches up with a 50% retracement of the index' March to October sell wave and 3) it also happens to bracket the Nasdaq's 200-day simple moving average at 1,500.
Yet also note that the 1,502 level currently represents the upper end of the Nasdaq's 10-day Bollinger bands. With the way the index has been acting recently it wouldn't be completely out of the ordinary to see a test of that upper band over the next several sessions.
So getting to the very near-term technical levels -- look for the 1,467 to 1,469 range to serve as a near-term pivot point for the time being. That leaves the index with minor initial resistance at 1,475 followed by additional overhead in the range of congestion at 1,490 to 1,494. Once again, the real level we'll be looking towards is that 1,500 to 1,520 range on an intermediate-term time frame.
To the downside, continue to watch for the first real support in the range of our former resistance at 1,448 to 1,452. That's followed by relatively modest support points at 1,440 and 1,430 and then again by the infamous floor at 1,423. We've continually discussed the favorable volume as the markets move higher -- that is the stronger volume on up days relative to down days. This dynamic remains evident even following the notable break at 1,423, and with the way the charts are shaping up we continue to favor both an intermediate-term -- as well as a near-term -- bias to the upside. -- Mike Ashbaugh, Briefing.com
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+BRCM+CMOS+CSCO+DPMI+FLEX+INTC+KLAC+LLTC+LSCC+LSI+MOT+MU+MXIM+NSM+NVLS+SNDK+SMTC+TER+TXN+XLNX+^VIX+^IXIC+^SPX+SMH&d=t
Gottfried, in 2000 BPNDX reached 88. It has been as high as 83 since. Looks like it wants to go there now to me.
RtS |
