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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: isdsms who wrote (46922)	2/4/1999 6:27:00 PM
From: Roads End	Respond to of 97611

Ira...You are missing the point. There was no correction today. If you want to explain the last 18 months of CPQs non performance as nothing more than today's correction please take another unbiased look. CPQ had the opportunity to show us they are doing "just fine" at their last earnings release and CC. Do you think that is the message they delivered? Steve

To: isdsms who wrote (46922)	2/4/1999 6:46:00 PM
From: rupert1	Read Replies (1) \| Respond to of 97611

If it makes anyone feel any better than it makes me feel, I bought a tranche at $45 1/8th two minutes before the close. To be honest I was in the process of cancelling my order when it executed. A week or so ago, I suggested that the stock would go to $45 and maybe $42. My main reason was that it was fully valued at $47-49. I sold the balance of my holdings at $48 1/8th having sold some previously at $50. My conviction that it would go to $42 was growing and I stated it to a colleague today. However, I did not think that this would happen today or tomorrow. I thought I would go for a 1 point fast trade if I could get it at $45 1/8th. The late downward momentum concerns me. It will be interesting to see if this momentum will carry the stock down at the open and whether there will be bargain hunters driving it back up. I think $42 provides good support. But in the event of a major market correction, it could go lower. Against that there is the enormous amount of cash waiting on the sidelines, and the tendency of of the market to jump in for bargains quite soon in a downdraught. Next week, the end of the impeachment process and - possibly - renewed interests in DELL's earnings, may provide some relief. Given the optimism that DELL generates I can't believe that it won't attract buyers soon. But I would expect a sell-off after earnings. CPQ may be caught in the choppy waters but will benefit a week or two after DELL's earnings as ex-DELL money finds a new home. I think the main cause of the sell-off is overvaluation among techs. Today the general unease was given some focus with the discussion of the Fed moving to a tighter bias but I don't think this is a serious factor. I suggested last week that CSCO results would be a convenient excuse for a sell-off, and I think it has contributed. The sell-off in IBM and some of the other large cap tech stocks is also influential. But they have all risen faster than CPQ. Some positive points to ponder. CPQ had 2/3rds of normal volume today, and the last $0.7/8ths fall was on extremely low volume and probably represented day traders getting out before the close. It was as though CPQ would have preferred to stay in the $46 1/2 - $47 1/2 range but it was overwhelmed and reluctantly slipped with the market. There were some aggressive buyers throughout the day. If the payroll figures are high tomorrow this may feed the incipient unease about higher interest rates, but usually, positive economic news is good for tech stocks. I have to disagree with many of the negative criticisms of CPQ and its Alta Vista announcements. The integration with DEC has gone better than most could have managed and the focus on getting AV positioned is also far ahead of where most people expected them to be. I think it would be highly unusual and very suspect if they had prematurely announced a give-away of shares to shareholders in an AV entity which is not yet designed, costed or funded. The development of AV in the way enunciated will unlock its potential for shareholders. CPQ is a supertanker (to borrow a phrase) which has just emerged from a port of call, is almost back out on the open ocean and has almost got full-steam up. I think it will certainly be $50+ and probably $60 at about the time of next earnings in mid-April.