Steve Zito, MS Fin/BS Econ Wharton School, HTML Writers Guild
uses economic and technical analysis to forecast the direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice on investment decisions.
Nasdaq Mar.15 Nasdaq Mar.10 INDEX **INTEL REVIEW** EMAIL

NASDAQ COMPOSITE
INDEX closed 1890.91

Is the Nasdaq RALLY closer than ever?
Sun., Mar.18, 2001

******************Commentary*******************
Mar.18. Nasdaq lost 2.6% Friday on new earnings warning Mar.15 by ORACLE, this time for next quarter, according to Oracle CFO Henley. With lawsuits for misrepresentation of earnings, Oracle is a stock to AVOID. Negative sentiment from Oracle after INTEL had warned of a revenue shortfall a week ago, sent Nasdaq below 2000. On Thursday, Oracle CEO Larry Ellison made comments that (revenue) visibility is limited (translate: it's not his fault), yet the (order) pipeline looks good (translate: customer orders postponed Feb. 28 might be postponed again), and layoffs are coming (referring to dismissed employees as "HEADS"). The subsequent sell-off Friday took Nasdaq below 1900. Short-term stochastics (10-day chart) went up to 20.98/14.61% (vs 1.46/39.91%). Nasdaq is making new lows, yet now is less "oversold" than before the Oracle news, because new price lows in Oracle are over-weighted in the closing Index price. Intermediate (90-day chart) stochastics have fallen to 3.61/22.90% (vs 5.59/23.75). Longer-term (2-year Nasdaq chart) stochastics are most over-sold at 1.30/27.84% (vs 1.85/27.90). These very over-sold data readings forecast a profitable Nasdaq rally, steep enough for a classic V-shaped bottom. But when? Confirmation of a sustainable rebound will occur if the Nasdaq rises and closes above resistance at 2035. Not hard to predict the media will blame it on the Federal Reserve. INTEL stochastics fell to "buy" territory at 5.10/43.71% (vs 15.31/45.92%). Intel tested $28 six times. Piper Jaffray's Ashok Kumar predicted $26 INTEL for Springtime. Last Fall, this is the astute analyst who first predicted semiconductors were about to sink. INTEL must make $28 base for a $39 target price. MICROSOFT stochastics are not over-sold enough at 30.92/42.64% (vs 21.71/43.39%). Support at $51-52 needs to be tested once again. CISCO stochastics are neutral and directionless at 23.81/24.67% (vs 29.52/22.64%). With tremendous growth potential in China, and now corrected to levels not seen in two years, CISCO remains attractive. ORACLE crashed again on fresh earnings WARNINGS Thursday. Exited ORCL in the Model Portfolio at $16. Oracle stochastics rose to 10.16/16.12% (vs 4.41/16.21%). MACD -2.97 fell, RSI 28.55 lower, management is making EXCUSES. When it gets to $8, I will look at it. Worldcom stochastics at 73.58/46.29% (vs 77.36/42.17%). Overhead resistance validated Thursday at $18. Wait for $15, switch to SPRINT. DELL stochastics fell to 38.55/64.06% (vs neutral 55.21/65.28%). RSI fell back below 50% at 49.12. Dell is a trading "buy" at $20.50. Poor COMPAQ news Thursday will take the momentum out of PC stocks. Nasdaq has fallen over 1% per day for 15 trading days, 16.4% since Feb.24. In that time, Cisco down 25.6%, makes it tops for recovery.
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