Techs Slip On Intel Rumors

Technology stocks traded lower Thursday on rumors that Intel may issue another earnings warning.

The ISDEX http://www.wsrn.com/apps/ISDEX/ rose 4 to 377, but the Nasdaq slipped 20 to 2519. The S&P 500 added was unchanged at 1328, and the Dow gained 48 to 10,851. Volume rose to 453 million shares on the NYSE and 955 million on the Nasdaq. Advancers led by 16 to 10 on the NYSE and 20 to 16 on the Nasdaq. For earnings reports, visit our earnings calendar at http://www.wsrn.com/apps/earnings/internet.xpl and reported earnings at http://www.wsrn.com/apps/earnings/ireported.xpl. For after hours quotes and news, visit our after hours trading site at http://www.afterhourstrading.com.

Blue Martini soared 4 1/8 to 17 7/16 on news of an alliance with Intel , which fell 2 to 30 9/16 on rumors that it will issue an earnings warning.

eBay surged 3 3/16 to 38 7/16 after the company announced its first national television advertising campaign.

An earnings warning from F5 Networks , off 3 5/16, rippled through the infrastructure space. Inktomi , down 1 5/16 to 21, and CacheFlow , off 8 1/16 to 23 5/16, fell on the news. Radware initially fell on the news, then recovered to trade up 2 3/4 to 19 13/16 after saying its quarter is on track. Foundry , which had warned previously, slipped 5/8 to 15.

Symantec rose 4 1/16 to 35 after saying that business remains strong. The stock had fallen on Network Associates’ warning yesterday. CheckPoint regained 3 to 138 1/4.

Amazon.com tacked on 1/16 to 16 15/16 after Janney Montgomery Scott upgraded the stock from Sell to Hold on somewhat better than expected holiday sales.

Some technical comments on the market: Note: We are now including charts in the technical market commentary. If you can’t get the charts via the e-mail newsletter version, try this link: http://www.afterhourstrading.com/column.html

The Nasdaq 100 could be forming a rising wedge or bear pennant here (see first chart). At the least, it’s hugging the lower end of its rising channel, so a lot of early strength has gone out of the rally. Also, the index ran into resistance at 2500, a previous support level. So if it’s a bear pennant, how low could the index be headed? If we measure the “pole” from the previous consolidation at 2500, we could be headed for a retest of the lows. If we measure from the previous large consolidation at 3000, the picture looks a lot worse. We’ll pick the rosier scenario, given the strong support of the 1990 trendline at 2300 on the Nasdaq.

The S&P 100 could also be forming a bear pennant or rising wedge, and looks very similar to the Nasdaq 100. A retest of the 650 level could be in store.

The Dow continues to outperform. It is approaching critical 10,900 resistance here, and may have already broken a downtrend line. However, the index is becoming overbought and is due for a pullback. A clean break of 10,900 would likely carry the index to 11,500, with the caveat that it could face resistance at 11,000, 11,200 and 11,400.

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