Breadth Improving…Bottom Forming?

July 20, 2001
Greg Che

Stocks opened lower Friday and
continued to trade lower through the session.

With the storm of earnings coming to
an end, the Dow Jones Industrials shed 0.3%, and the Nasdaq Composite fell 0.8% on
the last trading day of the week. The markets endured disappointment after
disappointment, as earnings from key companies were reported and finished the
week on a day which is typically volatile as options expire.

Is a bottom forming? Analysts believe
that if the Nasdaq breaks below the 2000 level and tests the 1900 levels, it
would create buying opportunities for traders. Breadth has been picking up,
indicating this could happen. Traders will have time to think about this
scenario over the weekend.

Office Depot
(
ODP |
Quote |
Chart |
News |
PowerRating) rose 9.4%
after the company was upgraded by Wachovia Securities and reported earnings for
Q2 of 14 cents a share meeting the high end of the range of analyst
expectations. According to Thomson Financial/First Call analysts on average were
looking for a 12 cent gain.

Tetra Technologies
(
TTI |
Quote |
Chart |
News |
PowerRating) shares
rose 15.8% after the company reported Q2 earnings which more than quadrupled.

Shares of Global Payments
(
GPN |
Quote |
Chart |
News |
PowerRating)
gained in trading 12.3%, after the company was upgraded by Robinson Humphrey.

IPO, Natus Medical
(
BABY |
Quote |
Chart |
News |
PowerRating) tacked
on 31.3% from its IPO offering price of $11.00.

Sage
(
SAGI |
Quote |
Chart |
News |
PowerRating) rose 25.6% after the
supplier of digital display processors reported earnings yesterday for Q1 and
was upgraded by Needham & Company.

Supply chain software developer
Manhattan Associates
(
MANH |
Quote |
Chart |
News |
PowerRating) gained 31.1% after reporting record sales for
Q2.

Insituform Technologies
(
INSUA |
Quote |
Chart |
News |
PowerRating)
shares got slammed in the session after the construction company reported
earnings in line with estimates but issued a cautious statement for the second
half of the year. Insituform dropped 22.9%

Avant
(
AVNT |
Quote |
Chart |
News |
PowerRating) lost ground in the
aftermath of the ruling which came down yesterday stating AVNT must pay $182
million in the Cadence theft case. Shares of Avant closed 30.9% lower.

Capstone Turbine
(
CPST |
Quote |
Chart |
News |
PowerRating) slid
24.6%
after Wedbush Morgan downgraded the company from a Strong Buy to a Long Term
Attractive.

Voice-recognition software maker
Nuance Communications
(
NUAN |
Quote |
Chart |
News |
PowerRating) fell 19.4% after reporting a Q2 loss of 34
cents a share, in line with estimates, however the company warned of weaker Q3
numbers.

Scientific Atlanta
(
SFA |
Quote |
Chart |
News |
PowerRating) lost
35.0%
after the company was downgraded by Gerard Klauer Mattison, Raymond James,
Deutsche Banc, Alex Brown, Wachovia Securities, Morgan Stanley and Credit Suisse
First Boston.

Gateway Computers
(
GTW |
Quote |
Chart |
News |
PowerRating) shares got
battered after the company reported its second consecutive quarter loss. The PC
maker reported a Q2 loss of 2 cents while analysts were expecting a breakeven
quarter. GTW closed lower 24.6%.

Arch Coal
(
ACI |
Quote |
Chart |
News |
PowerRating) slipped 15.9%
after the company reported earnings which fell short of analysts’ expectations.
Analysts were looking for earnings to come in between 5 to 18 cents with an
average of 13 cents, according to Thomson Financial/First Call. The company’s
earnings came in at 2 cents a share.

Breadth Improving…Bottom Forming?

BUY THE FEAR, SELL THE GREED

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