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

To: Johnny Canuck who wrote (40291)	10/2/2003 1:47:14 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70946

Updated: 02-Oct-03 General Commentary The market rallied strongly on Wednesday with the major indices posting solid advances following what has been a tough two weeks. Even with Wednesday's gains, the Dow (9469.2 +194.14) is down by almost 200 pts, the Nasdaq (1832.25 +45.31) by 70 pts, and the S&P (1018.22 +22.25) by 11 pts from their mid September peaks. Moving forward, stocks are likely to remain choppy through October as investors and portfolio managers continue to take profits off the table and begin end-of-year portfolio adjustments to minimize taxes. Although the Fed model suggests stocks are modestly undervalued, ongoing concerns over job growth, and consumer and corporate spending are likely to keep a lid on further gains over the near-term. On the consumer side, limited channel checks suggest the early strength in back-to-school sales did not carry through as the early strength was driven by promotions and an early start to the back-to-school season. On the corporate front, clear evidence has yet to emerge of job growth or strong corporate IT spending. Investors seeking confirmation of growth in IT spending need look no further than Silicon Valley, where the market for IT professionals remains depressed. In this context, investors need to be highly selective over the next few weeks. Focus on industry leaders with limited dependence on corporate IT spending and companies who derive a greater percentage of sales from faster growing Asia markets. Some names we would focus on include: ATI Technologies (ATYT, 15.82 +0.96): New Radeon product introductions driving business momentum over rival NVDA. High operating leverage. Trading at: 63x Reuters Research consensus '03E of $0.25 vs. NVDA (16.10 +0.13) at 33x '04E of $0.70; and 34x '04E of $0.46 vs. 23x '05E of $0.70. The companies have different fiscal years. Electronic Arts (ERTS, 94.89 +2.71): Leader in software entertainment / gaming. Expect new consoles, developing formats and new games to continue driving sales. Trading at 28x '04E of $3.39; 25x '05E of $3.84. Fiserve (FISV, 37.66 +1.37): Play on general recovery and trend towards outsourcing. Improvement in capital markets and acquisitions helping to expand top line and margins. Trading at 24x '03E of $1.60; 20x '04E of $1.86. UT Starcom (UTSI, 31.91 +0.11): Approximately 80% of sales from the fast growing China wireless and network access market. Trading at 20x '03E of $1.56; 17x '04E of $1.91.-- Ping Yu, Briefing.com