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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: synchro who wrote (6200)	5/4/1999 11:58:00 AM
From: Daflye	Read Replies (1) \| Respond to of 17183

From The Street.com --------------------------------------------------------------------- That Deere in the Headlights By James J. Cramer 5/4/99 11:41 AM ET What is the major trend? Where is the money really going? Is the action in the drug stocks (flat for a couple of days) a signal of a bottom? Is the NDX rally today's countertrend? These questions flow through our shop all day, every minute and every hour. We are constantly trying to figure out what the major and minor trends are, always with an idea toward trying to figure out the Easy money and avoid the Hard money. So let's focus on two different stocks to bring the exercise into focus, Deere (DE:NYSE) and EMC (EMC:NYSE). Both have had bad news of late. In EMC's case there is news of a Hewlett-Packard (HWP:NYSE)-inspired loss of business. The company has assured us that it is minor and will be made up, and the stock had already been down 25 points in advance of the bad news. Everybody reiterated buy and made nice to the stock. Deere, on the other hand, right at its 52-week high last Friday, slapped us with some horrid news: a preannouncement of bad earnings. This was no loss of a piece of business, this was an acknowledgement that business stinks. Downgrades and number cuts surrounded the story. How did these companies react to the news? EMC got crushed again, down another 10%. Holy smokes, that's a rough one. Despite all of that reiteration-of-buy-rating buying. Ouch. Deere? Two days later it is back to the level where it preannounced. Without any Street support. That's amazing to me. It is why I bought Halliburton (HAL:NYSE) on the discount caused by the DLJ downgrade, and why I am not speculating on EMC now as much as I would love to. My point: The major trend lets you have your back. Does that mean you should sell your Cisco (CSCO:Nasdaq) to buy Parker Hannifin (PH:NYSE)? No, it just means that the big money keeps going in one direction and you have to know that direction to trade well.