93% OF READERS COME BACK AGAIN!

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 for investment decisions.
Nasdaq Dec. 7 Nasdaq Nov.26 INDEX *INTEL REVIEW* EMAIL

NASDAQ COMPOSITE
INDEX closed 3015.10

Seven of 9 indicators are POSITIVE
Mon., Dec. 11, 2000

******************Commentary*******************
Dec.11 Nasdaq Composite has made very successful tests of the 2700 level, my forecasted year-end target. Nasdaq 10-day chart stochastics are now over-bought at 91.85/92.20% since turning positive on Dec. 7 at 36.80/23.21%, when Nasdaq tested 2700 last. Nasdaq 90-day chart stochastics are fast approaching over-bought at 97.22/42.68% versus 48.27/30.77% Dec. 7. Finally, Nasdaq 2-year chart stochastics rose to 48.58/23.22% (from 19.27/17.48% Dec. 7). Stochastics on all Nasdaq charts turned positive last week for the first time since August. Today strategists at Lehman, Goldman, Morgan Stanley, and CNBC jumped on the bandwagon, and proclaimed Nasdaq's 9.5% rise in two days as the next great "bull market". Where were these strategists at Nasdaq 2550 two weeks ago? You guessed it. Proclaiming it a "bear market". The Model Portfolio bought ORACLE on Nov. 27, gained 33%, and then made another 9% in INTEL, DELL, and ORACLE in one day on Friday. INTEL stochastics are rising at 46.26/20.27% (vs. 6.85/31.17% Dec. 7). INTEL moved right through $36 resistance despite negative brokerage house downgrades on lower forecasted earnings, strange announcements by Lehman's Dan Niles that this move in INTEL is a "false rally." This is the same analyst once forecasting INTEL going to $88 this year. I recommend that all of my readers apply for his job. Tom Galvin of CS First Boston advised the public last week on CNBC to wait on sidelines until Spring to buy technology stocks. Galvin's firm came out today and proclaimed a market rally. This "guru" has not made one accurate call for this year's technology stocks smash. Abby J. Cohen has had a year-end target price for the S&P 500 index of 1575. My advice to Abby is keep the target, just change the target year to Dec. 2001! MICROSOFT stochastics have turned positive to 33.21/14.14% after being over-sold at 4.42/25.72% last week. There are better managed companies elsewhere. CISCO has an overvalued P/E of 135.24. CISCO stochastics at 91.28/49.75% are already over-bought and my forecasted $48 CISCO target price is based on psychological buying patterns of mutual fund managers, not great value. ORACLE went up 33% since I forecasted it. Stochastics are now over-bought at 97.09/67.47% (compared to 67.28/53.34% a few days ago). ORACLE's 29.25 P/E is OK. ORACLE hit bottom at $22 and surged 33% to $31.50 after I added to Model Portfolio at $23.81. WORLDCOM stochastics turned positive at 80.95/36.46% (from 23.26/34.01% last week). DELL is $20, with improving 39.13/12.74% stochastics, and a value P/E of 24.50. The US dollar has fallen a bit against the Euro, adding a boost to DELL's revenue from foreign exchange on European sales, which could lead to an earnings surprise in January, first predicted Oct. 27.
Copyright Notice, all pages Copyright©2000 and are made available as a service to the global Internet community. Pages may not be reproduced or sold in any medium without explicit, written permission from Steve Zito.