THE NASDAQ PAGE by STEVE ZITO

Steve Zito (MS Finance) is a fundamental analyst who also uses economic and technical analysis to forecast general direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice for investment decision-making. If you have a specific question please try the Feedback form. ---Home Page ---INDEX ---Model Portfolio ---Market Data

NASDAQ INDICATORS
SUPPORT/RESISTANCE

Eight of 9 indicators are NEGATIVE
Thur. April 20, 2000

NASDAQ NOW 3643
CHART INDICATORS
Daily chart: 20-day moving average
Intel at 115
Negative trend
resistance 125

Microsoft at 75
Negative trend
resistance 89

Cisco at 65
Negative trend
resistance 69

Oracle at 70
Negative trend
resistance 76

MCI WCOM at 40
Negative trend
resistance 42

Dell at 50
Negative trend
resistance 52

Daily Nasdaq COMP
Negative
resistance 4085

Weekly Nasdaq COMP
Negative
resistance 4122

Monthly Nasdaq COMP
Positive
long-term support 3093

The MACD, RSI, stochastics on the Weekly and Monthly charts still show an overbought condition!

******************Commentary*******************
10 PM April 20. Intel Corp.(INTC) broke down March 28 at 145 as forecasted March 23. MACD, RSI and stochastics remain negative with INTC barely 5 points higher than Friday's low, closing below Daily chart resistance of 125. Shows severe price weakness on 1stQ earnings, heading into a seasonally weak 2nd quarter. I predicted weakness on Nasdaq Page April 18. Microsoft(MSFT) declined severely from 115 to 75 since March 24. MSFT is oversold with stochastics at 10% and an MACD bottom Friday. MSFT is the only NASDAQ leader which did not rally to its 20-day moving average this week. MSFT could not even rally in advance of 1stQ earnings report, which showed a mildly positive earnings surprise. Watch for a pop in "Mister Softee" in May after government briefs are filed April 28, and conclusion of a May court date for Judge Jackson's remedies in the antitrust case. I added 10 MSFT May 100 calls to the Model Portfolio on Monday when the NASDAQ COMP went below 3300. When the option doubled Tuesday with MSFT up 5 to 81, I exited position for a 157% gain in Model Portfolio.
CISCO(CSCO) at 65 rallied back to its 20-day moving average of 69 on Tuesday, but MACD, RSI and stochastics look terrible. Friday April 14 CSCO went straight down to 55 forecasted in my Nasdaq Page April 11. Cisco will be a buy below 50. Oracle Corp.(ORCL), is 70, below resistance at 76. MCI Worldcom(WCOM) is 40, below resistance at 42. MCI WCOM is the safest play of the leaders, will go sideways while the others crash and burn. Dell(DELL) is at 50 and Goldman downgraded PC growth this week.
On April 11, I predicted that the Nasdaq COMP would trade within an 11% range of 3650. It hit 3230 at the low Monday, and rebounded through Wednesday, up 563 points, or over 17% in 2 days. Is the bull starting over? No. The index bounced off the 20-month moving average. I said traders would come back when they saw at least any up move for 2 hours. They did, and ran the daily stochastics up to higher levels than last seen in 3-day rally April 4. I measured stochastics on Tuesday at 97.28%/95.81%, on the 30-minute NASDAQ chart, an extremely overbought condition.
The rally died after only 2 days, the previous April rally lasted 3 days, and the late March rally lasted 4 days. In after hours trading today, MSFT dropped 4 points, and the leaders on the NASDAQ COMP ended down 3% for the day. Watch out for more selling Monday, April 24.
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