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.
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NASDAQ COMPOSITE
INDEX closed 1851.39

Nasdaq has near-term support Mar. 25, 2002

******************Commentary*******************
Mar. 25 Go To Page 1. Technical Analysis: RSI, MACD, stochastics
Nasdaq Largest cap: Intel, Microsoft, Cisco, Oracle, Worldcom, Dell

Intel closed 30.59 -0.81 (-2.6%) below moving average resistance at 31.25. RSI, MACD negative, stochastics plunged to 22%/35%. Two months ago, I said the stochastics were forecasting that Intel would remain in a trading range 32 to 36. It did until late February, and after breaking below 28.50, Intel rallied to 34.30. The stock is over-valued on a P/E basis, but low risk on increasingly strong cash flow.

Microsoft closed at 60.45 -0.91 (-1.5%) below its MA resistance at 61.30. RSI, MACD negative, stochastics fell to neutral 20%/35%. The stock was not in tandem with the movement of the Dow for the past 8 weeks. Bill Gates has sold a lot of his holdings at higher price levels around $72 over the last year. Not hard to imagine that Gates knows more of his business than unimaginative mutual fund managers.

Cisco Systems closed at 16.57 +0.08 (+0.5%) above MA support at 16.55. RSI negative, MACD positive, bearish to neutral stochastics rose to 48%/28%. I said in January CSCO had made a "double-top"
to buy Feb.20 puts if you own it. By expiration in mid-February, the stock was down to 17.50. Internet growth is cooling off. Chambers the CEO is lacking credibility but CSCO has tons of cash. This indicates that Chambers cannot find projects with investment returns that are higher than short-term money market yield on his $16 billion cash.

Oracle Corp. closed at 12.85 -0.30 (-2.3%) below MA resistance 13.05. RSI, MACD very negative, stochastics falling into neutral to bearish 38%/42%. Management in company is getting a reputation for overly optimistic guidance. This investor misguidance began February 2001.

Worldcom closed at 6.98 -0.16 (-2.2%) just below MA resistance at 7.20. RSI, MACD negative, stochastics fell to 23%/35%. This WCOM appears to be building a new base around 7.00, but with customers of Worldcom going bankrupt every week, no upside is in sight soon. If only the fund managers looked for laggards like they used to in 1980.

Dell closed at 26.56 -0.43 (-1.6%) below its 90-day MA resistance at 26.80. RSI, MACD negative, stochastics falling to 40%/60%. Stock has done nothing in months, no gain over one year, or two years, still a winner compared to telecoms pushed by Joe Battipaglia (JDSU).

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