AI
| Followers | 71 |
| Posts | 12229 |
| Boards Moderated | 1 |
| Alias Born | 04/01/2000 |
Monday, August 04, 2003 10:37:43 PM
NASDAQ NEWS: Tech Stocks Tired
By Jody Osborne, Optionetics.com
8/4/2003 4:30:00 PM
Tech stocks have looked a bit tired this past week, with the Nasdaq ($COMPQ) trading in a narrow range during the past month. On Monday, tech stocks got off to a bad start, but were able to bounce back and finish with just minor losses. Surprisingly, the Naz finished in the red despite an upgrade of Cisco (CSCO) and positive economic news.
Cisco is set to report its quarterly earnings Tuesday after the bell, with analysts expecting the networking giant to post EPS of $0.15 a share. However, it seems traders are a bit more upbeat, with the whisper number coming in a penny higher. This means that if Cisco disappoints, it could be in store for lower prices. The stock reached a new 52-week high just last Thursday, so hopes are high. Besides the overall earnings view, traders will be looking for signs of optimism from the company. This will come from words and deeds, with traders looking for higher capex spending. Cisco shares saw little strength on Monday, despite getting an upgrade to “Strong Buy” from “Outperform” at SG Cowen.
The Philly Semiconductor Index ($SOX) saw mild gains on Monday after the Semiconductor Industry Association [SIA] released world-wide chip sales figures for June. On a year over year basis, chip sales were up 10.4 percent. However, month over month growth was just 0.3 percent. Nonetheless, SIA believes a broad-based recovery is emerging in the sector. The SOX is just 17 points from a new 52-week high, but with optimism high, it could be difficult for the sector to live up to expectations.
On a technical basis, the SOX has formed an ascending triangle this past month. This formation is developed when the highs remain constant, with the lows moving higher. This consolidation pattern normally precedes a large breakout move for the stock or index. This is something to keep an eye on.
Figure 1: Daily Chart of $SOX
Overall, economic news is likely to have the largest impact on trading in the next few months. This could be good or bad, depending on the news. However, it is going to take rather strong economic information to keep stocks moving higher given the sharp rally they have gotten the last four months. Nonetheless, the bulls have remained strong and have not allowed sharply lower prices to set in. Even so, the market is at a key juncture, with analysts and traders unsure of what to expect in the months to come.
Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Jody's Forum
By Jody Osborne, Optionetics.com
8/4/2003 4:30:00 PM
Tech stocks have looked a bit tired this past week, with the Nasdaq ($COMPQ) trading in a narrow range during the past month. On Monday, tech stocks got off to a bad start, but were able to bounce back and finish with just minor losses. Surprisingly, the Naz finished in the red despite an upgrade of Cisco (CSCO) and positive economic news.
Cisco is set to report its quarterly earnings Tuesday after the bell, with analysts expecting the networking giant to post EPS of $0.15 a share. However, it seems traders are a bit more upbeat, with the whisper number coming in a penny higher. This means that if Cisco disappoints, it could be in store for lower prices. The stock reached a new 52-week high just last Thursday, so hopes are high. Besides the overall earnings view, traders will be looking for signs of optimism from the company. This will come from words and deeds, with traders looking for higher capex spending. Cisco shares saw little strength on Monday, despite getting an upgrade to “Strong Buy” from “Outperform” at SG Cowen.
The Philly Semiconductor Index ($SOX) saw mild gains on Monday after the Semiconductor Industry Association [SIA] released world-wide chip sales figures for June. On a year over year basis, chip sales were up 10.4 percent. However, month over month growth was just 0.3 percent. Nonetheless, SIA believes a broad-based recovery is emerging in the sector. The SOX is just 17 points from a new 52-week high, but with optimism high, it could be difficult for the sector to live up to expectations.
On a technical basis, the SOX has formed an ascending triangle this past month. This formation is developed when the highs remain constant, with the lows moving higher. This consolidation pattern normally precedes a large breakout move for the stock or index. This is something to keep an eye on.
Figure 1: Daily Chart of $SOX
Overall, economic news is likely to have the largest impact on trading in the next few months. This could be good or bad, depending on the news. However, it is going to take rather strong economic information to keep stocks moving higher given the sharp rally they have gotten the last four months. Nonetheless, the bulls have remained strong and have not allowed sharply lower prices to set in. Even so, the market is at a key juncture, with analysts and traders unsure of what to expect in the months to come.
Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Jody's Forum
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
