‘Let Them Do It’

• April 2, 2002
• Kevin Haggerty

After
a big early red down, the
techs led a rally from noon into the close. There was a negative up-volume to
down-volume ratio all day, despite the rally. It was 4:1 negative in the
morning, until a 1 2 3 higher bottom pattern carried through into the close, as
the SPX
(
$SPX.X |
Quote |
Chart |
News |
PowerRating) rallied from the 1132.87 intraday low into the 1446.54
close, which left it a point from the previous close. The 1131.61 swing point
low mentioned yesterday held. The up-volume to down-volume ratio was 1.3:1
negative at the close, which is a volume ratio of 43. NYSE volume was 20% below
average at 1.038 billion, and breadth negative at -260.

The
(
$SOX.X |
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Chart |
News |
PowerRating) at
+2.5% led the techs, along with the
(
$NWX.X |
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Chart |
News |
PowerRating), which is the networkers, at
+2.1%. Banks, brokers, basics and retail were red all day. The techs had led
Thursday, and it looks like some money got rolled into tech yesterday, possibly
from the retail downgrade and hopefully some new monies. April is the strongest
month for most techs on a seasonality basis, so let’s hope that this can offset
the downtrend in the NDX
(
$NDX.X |
Quote |
Chart |
News |
PowerRating) since the Dec. 6 high. The Generals see
the inverted head and shoulders with a breakout level above 1174, which also
puts it above all of its moving averages, and if they can, they will, but it
will take more than techs to break it out.

On the tech side, I use
the Fidelity Select Computer Fund
(
FDCPX |
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News |
PowerRating) and the Fidelity Select
Electronics Fund
(
FSELX |
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PowerRating) as my primary tech barometers, along with the SOX
and
(
SMH |
Quote |
Chart |
News |
PowerRating). Fidelity has outstanding money managers and analysts, so why not
let them do the homework and just ride the breakout from their current bases if
they are correct, which are right at the base of the trading tree with a
flattened-out 200-day EMA on both of them? This is a much better way to get
involved from a position standpoint than thinking you can sift through the
current earnings scam and analysts with forked tongues giving you after-the-fact
analysis due to their banking relationships. Try it. You’ll like it.

Stocks
Today

If the semis carry
through in price, in spite of the reduced volume, focus on
(
MCHP |
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PowerRating),
(
KLAC |
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News |
PowerRating),
(
NSM |
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News |
PowerRating),
(
TXN |
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News |
PowerRating) and
(
TER |
Quote |
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News |
PowerRating).

Also,
(
ADBE |
Quote |
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News |
PowerRating),
(
ADVS |
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News |
PowerRating),
(
CAM |
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Chart |
News |
PowerRating) and
(
DO |
Quote |
Chart |
News |
PowerRating). 

Have a good trading day.

Five-minute chart of
Monday’s SPX with 8-, 20-,
60- and 260-period
EMAs

Five-minute chart of
Monday’s NYSE TICKS