Horsemen Stumbling Out of the Gate

  • October 20, 2000
  • Eddie Kwong


There were a lot of rockets off the launching pad
Friday. With the Naz up triple digits, I turned to my Nasdaq bellwethers to get
at the underlying truth.

I do this because any meaningful change in direction for the Naz must involve
the Intel
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PowerRating), Cisco
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As of the time of this writing, SUNW looked good, but the others still had their
work cut out for them. The most egregious case out of the four horsemen is ORCL.

I don’t know about you, but when I see a stock that is hitting
this kind of thick resistance, I get a little antsy about the bullish argument.

You’ve got ORCL hitting these resistance factors:

  • The top of a three-week range

  • The top of a downtrending channel

  • The 200-day moving average

  • The 61.8% retracement off ORCL’s early-Sept. high and
    early-Oct. low

All this is happening on anemic volume, suggesting that today is
not ORCL’s day. If ORCL does not break above this level and we see that INTC and
CSCO are not able to pull out of their multi-week downtrends, this could have a
profound dampening effect on the current Nasdaq rally.

So–as part of your checkup on the health of this rally–keep
your eyes on the bellwethers next week.

Have a great weekend!

Eddie