From Briefing.com: Updated: 11-Apr-03 - General Commentary - There's a market adage that states you should never sell into a quiet, dull market. Idea being that such periods typically precede rally efforts. Well, if true, then hold on to your hats boys and girls as the market must be preparing for one wild rally.
With little direction coming from the war front, a lack of market moving economic news and earnings season not kicking into high gear until next week, investors opted to sit tight and wait for more data before determining which way to take the sector/market. Nasdaq, which spent the entire session confined to an excruciatingly narrow 17-point range, closed up a modest 9 points, or 0.7%. Volume totalled an anemic 1.2 bln shares.
About the only excitement in tech came from the Internet group. Looked a little like the golden olden days, with Yahoo! (YHOO) jumping 6% on better than expected earnings; Hotel.com (ROOM) surging 19% on a takeover bid from USA Interactive (USAI); and DoubleClick (DCLK) adding nearly 12% on a ratings upgrade.
Basically, no change in the overall picture. With war questions answered, market refocusing its attention on the economy and earnings and right now there's just not enough info on how the post-war period will unfold. Consequently, investors will continue to look at technicals for trading clues. Right now as long as Nasdaq holds above the 1337 area, near-term bullish tone remains intact. Resistance is in the 1420-30 range.
Robert Walberg, Briefing.com
4:19PM Juniper Networks beats by a penny (JNPR) 8.41 Unch : Reports Q1 (Mar) earnings of $0.02 per share, $0.01 better than the Multex consensus of $0.01; revenues rose 28.6% year/year to $157.2 mln vs the $155.4 mln consensus.
4:17PM Foundry Ntwks raises Q1 guidance (FDRY) 8.00 +0.03: Expects Q1 EPS of $0.09-$0.11 on $89.0-$91.0 mln in revs, vs consensus of $0.07 and $85.1 mln.
4:06PM Powerwave misses by two cents (PWAV) 3.43 -0.08: Reports Q1 (Mar) loss of $0.11 per share, $0.02 worse than the Multex consensus of ($0.09); revenues fell 49.9% year/year to $52.2 mln vs the $50.7 mln consensus.
9:32AM Novellus cut to Sell from Neutral at Fahnestock; price risk to $18 (NVLS) 26.98 -0.08: Fahnestock downgrades NVLS to Sell from Neutral based on expectations for cautious Q2 guidance; firm believes Q2 orders are likely to be down 5-10% sequentially, and thinks their Q2 and Q3 rev and EPS ests are too optimistic; believes 2003 EPS may be closer to $0.40 rather than their current $0.59 est, and if firm makes such an est cut, it would lower the predicted near-term risk for the shares to $18 and the 12-month upside to $28.
9:28AM Nasdaq technical levels : -- Technical -- From current levels, look for the 1357 to 1361 range to serve as a pivot point in the early going. To the upside, the index faces initial resistance at 1367, followed by additional overhead at 1378. To the downside, look for initial support in the range of 1347 to 1350, followed by a much more important floor at 1338.
10:42AM Technical Levels: So the Nasdaq carved out yet another 'consolidation session' yesterday. After starting the day modestly higher, the index reversed relatively early to carve out a notable 26-point loss. By the end of the session, the Nasdaq violated our final support point at 1367, to close eleven points under that level at 1356.
All in all, Wednesday's trade activity looked somewhat similar to that Monday session. Now one obvious difference is Monday traded the entire session in positive ground, while the index held negative for the better part of Wednesday. Yet the price action itself is where the similarities rest. In each instance, the Nasdaq edged off its best levels early on, to trade the better part of the session range bound. After holding 'respectably off' its best levels of the day -- again both Monday and Wednesday -- the index sold off substantially into the close.
At any rate, the chart above illustrates several of the levels we were looking towards yesterday. As always, this is an intraday chart of Wednesday's trade activity in which each bar on the chart represents the opening and closing levels for each five-minute time frame. Note the index found resistance early in the day at 1392, before backing off to observe a pivot point at 1378. The Nasdaq subsequently slipped under our final support point at 1367 and proceeded to observe that area as resistance for the latter half of the session.
This second chart is somewhat different than our conventional time frames. This is a fifteen-minute chart of the Nasdaq in which each bar on the chart represents the opening and closing levels for each fifteen-minute time frame. In essence, this chart provides a detailed view of the price action over the preceding three sessions.
Note many of the pivot points we've been looking towards are drawn in -- this chart illustrates when and where each of these levels were observed. Yet this view also gets at the similarities between those Monday and Wednesday sessions. Namely, the early strength, the apparent stabilization, and the subsequent sell pressure into the close.
So how does this play into the outlook on the daily chart? To provide context, recall when we reviewed the Nasdaq on Tuesday, we characterized the current outlook as a 'consolidative bias within the context of a broader uptrend.' That was followed by the review yesterday which took a much broader view of the Nasdaq's technical disposition.
All in all, the short answer is not much has changed to this point. The current outlook remains consolidative, within the context of a broader uptrend. To be clear, this means the immediate bias is flat to lower until the Nasdaq puts together something that looks like a near-term buy signal. Yet this broader positive bias will remain intact so long as the index maintains a posture above those major moving averages.
Now there are several random points of interest worth mentioning at this point. With that late day sell pressure, the Nasdaq closed under its 20-day exponential moving average which currently rests at 1369 -- again this fits with an immediate to near-term consolidative bias. Also note the Nasdaq filled the gap yesterday triggered by that Island Reversal pattern -- this should satisfy those in the camp contending every gap ultimately fills. Each of these are issues we may or may not address in further detail at a later date.
The final somewhat random point is considering the magnitude of this current leg lower, the underlying volume has been unusually light. The Nasdaq barely edged 1.3 billion total shares yesterday, and again, more than half the session's losses were triggered in the final twenty minutes. So while the immediate bias remains consolidative, it will take more significant sell pressure, and break below those major moving averages, before the broader bullish bias is going to change.
Getting straight to the technical levels -- from current levels, look for the 1357 to 1361 range to serve as a pivot point in the early going. To the upside, the index now faces initial resistance at 1367, followed by additional overhead at 1378. To the downside, look for initial support in the vicinity of 1347 to 1350, followed by a much more important floor at 1338. -- Mike Ashbaugh, Briefing.com
Advanced Micro Devices (AMD) 6.98 +0.06: The Wall Street Journal reports Microsoft announced its intention of delivering test versions of two operating systems for the much anticipated Hammer microprocessor family from AMD. These AMD chips will be the first which process both 64 bits and 32 bits of data.
Analog semi stocks could see profit taking - Lehman : Lehman believes that the combination of in-line results and in-line guidance by high performance analog co's may not provide enough of a catalyst for valuations to remain at the high-end of their trading ranges; firm would not be surprised to see some profit taking in these names given their recent out performance (LLTC up 19% since Jan 1, ADI +15%, NSM +11%, MXIM +8%, vs SOX +3% and S&P 500 -2%).
NVIDIA (NVDA) 13.40 +0.07: Forms alliance with Electronic Arts. The two companies will work together to produce and market next-generation 3D content under the EA GAMES and EA SPORTS brands.
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