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.18 Nasdaq Mar.15 INDEX *Bulletin Board* EMAIL me

NASDAQ COMPOSITE
INDEX closed 1928.68

The Nasdaq RALLY is very WEAK
Sun., Mar. 25, 2001

******************Commentary*******************
Mar.25. The very over-sold data readings Mar.18 forecasted overdue profitable Nasdaq bounce, steep enough for classic V-shaped bottom. But when? Confirmation of a sustainable rebound would likely occur when the Nasdaq closes and stays above intermediate (90-day chart) resistance at 1940. Nasdaq rebounded 2% Friday with NO economic news and short-term stochastics (on 10-day chart) were improving at 60.22/77.16% (vs falling 20.98/14.61%). Nasdaq is hitting bottom, yet less "oversold" than the previous tradeable bottom (Jan. 2), because new price lows in CISCO, ORACLE and SUN MICROSYSTEMS are over-weighted in closing Nasdaq Index prices. Intermediate (90-day chart) stochastics have recovered to 56.85/16.62% (vs an over-sold 3.61/22.90%). Longer-term (2-year Nasdaq chart) stochastics stayed over-sold at 12.25/26.02% (vs 1.30/27.84%). Not hard to predict this short rebound is VERY TENTATIVE when media, especially the dull tag-team at CNBC, talk about guaranteed recovering Nasdaq prices as a result of the Federal Reserve lowering key interest rates. Ladies and gentlemen, this time it's different. INTEL rallied as forecasted Mar.18. Stochastics rose to 79.07/27.53% (vs my "BUY" territory last week at over-sold 5.10/43.71%). Intel tested $28 six times, before Piper Jaffray Ashok Kumar forecasted INTEL to go under $20 for Spring and sent it plunging Monday. INTEL needs $28 base to go to $39 target price. Stochastics for MICROSOFT became over-sold enough for trading "BUY" at $50 as forecasted $51 support was tested last Wednesday. Stochastics now overbought and headed down again at 93.97/29.46% (vs 30.92/42.64%). MICROSOFT will hold support $51-54 and spurt. CISCO stochastics are very over-sold, remain in "BUY" territory at 8.77/24.17% (vs 23.81/24.67%). With tremendous forecasted growth in China in five years, CISCO has long-term potential and must hold at $18 base to rise. ORACLE rebounded gap open with short covering Thursday. Oracle stochastics rose to 67.86/25.10% (vs 10.16/16.12%). MACD (-2.44) rose, RSI 46.32 spiked, management ceased very public earnings warnings. WORLDCOM stochastics fell to 53.57/54.81% (vs 73.58/46.29%). Overhead resistance validated at $19. Support at $16. DELL stochastics rose to 92.93/61.24% (vs over-sold 38.55/64.06% ). RSI looks over-bought at 71.19. Dell is a trading "short sale" at $28. Negative news soon on unit shipments will take the momentum out of PC stocks. Nasdaq has fallen over 0.73% per day for 20 trading days, 14.7% since Feb.24. In that time, Cisco down 30.3%, makes it ripe for recovery. Forget the analysts. Markets outside the U.S. have greater long-term potential.Japan ADRs I selected in the prior week:
NEC(NIPNY)-up 21% Canon(CAJ)-up 11% Toyota (TM)-up 8%
One year anniversary. Thanks for reading. CANADIAN STOCKS!
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