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August 6, 2000. The Nasdaq Composite Index closed at 3787.36.
Two of the Big Six led the Nasdaq Index higher for a 3.39% gain last week. Cisco and Oracle averaged a 8.54% rise, with Oracle exploding for a 12.69% gain. Sellers continued to shed Intel, whose breakdown is identical to the plunge in Dell. Both are overvalued on a fundamental basis. Sideways trading Microsoft and Worldcom both remain oversold. Stochastics on Microsoft at 21.16/18.05% have turned up from 13.44/13.73% one week ago, and are still close to levels seen when Microsoft began a 32% run to 116 at the end of February. A new stock to watch is Sprint FON whose stochastics at 20.64/14.48% have bounced off a very over-sold bottom. FON stock has begun to stabilize. Most of the rise in Nasdaq last week stemmed from a surge in Oracle, whose stochastics have turned markedly higher and are gathering momentum. The stock had been unable to break out of a tight channel between 73 and 78, until Friday, when it gapped open at 78 5/16. The positive news to account for this surge will appear soon. For value, Worldcom has stochastics which are stabilizing at 16.08/16.95%, from 15.16/26.52% one week ago. Worldcom's price/earnings ratio of 22.00 makes Worldcom a far more compelling investment than Intel (p/e 46.37) or Dell (p/e 64.24). Dell dropped another 5.3% last week contrary to the market rise. One look at the Nasdaq daily charts shows the Index essentially unchanged since June 1, never becoming over-sold enough to sustain the recent summer rally to 4284. The RSI on daily charts is still falling, but higher than previous market bottoms in April and late May. There is more room on the downside, for another test of support at 3190.

5-minute Nasdaq chart support
5-period moving average 3783
20-period moving average 3776
MACD 2.54/0.80 positive
RSI 46.56 neutral
STOCHASTICS 82.02/63.79% positive
15-minute Nasdaq chart support
5-period moving average 3781
20-period moving average 3773
MACD 10.63/13.01 negative
RSI 47.77 neutral
STOCHASTICS 68.45/57.02% positive
30-minute Nasdaq chart support
5-period moving average 3777
20-period moving average 3758
MACD 21.99/20.80 positive
RSI 63.72 neutral
STOCHASTICS 41.27/49.81% negative
60-minute Nasdaq chart support
5-period moving average 3777
20-period moving average 3747
MACD 10.36/-3.18 positive
RSI 57.64 neutral
STOCHASTICS 75.61/76.21% negative
Daily Nasdaq chart resistance
5-period moving average 3751
20-period moving average 3882
MACD -56.58/-14.04 negative
RSI 34.02 neutral
STOCHASTICS 27.10/22.73% positive
Weekly Nasdaq chart resistance
5-period moving average 3870
20-period moving average 3908
MACD 11.31/31.97 negative
RSI 50.69 neutral
STOCHASTICS 65.89/65.62% positive
Monthly Nasdaq chart support
5-period moving average 3816
20-period moving average 3333
MACD 528.16/539.32 negative
RSI 64.96 neutral
STOCHASTICS 53.75/63.29% negative

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