=DJ TECHNICALLY SPEAKING: Nasdaq 100 Deletions Have Appeal [DCRPKTL]
By Karen Talley
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The restructuring of the Nasdaq 100 Index took effect
Monday. The conclusion of one technical analyst is that, overall, the deletions
are a better group of stocks than the additions.
Richard Suttmeier, chief technical analyst at Joseph Stevens, rates the eight
additions at sell or hold, and the eight deletions at either buy or hold.
The reasoning is that the deletions have been weak technically in anticipation
of being taken out and are undervalued and should be looked at as potential buys
on a January effect rebound. The additions, for the most part, are running out
of steam after a runup in anticipation of being added to the Nasdaq 100 Index,
which is rejiggered each year so that it contains the 100 largest nonfinancial
stocks that trade on the Nasdaq.
The eight additions include Marvell Technology Group (MRVL), Garmin Ltd.
(GRMN), Career Education Corp. (CECO), Intersil Corp. (ISIL), ATI Technologies
Inc. (ATYT) and Research In Motion Ltd. (RIMM). In addition, Lam Research Corp.
(LRCX) and Level 3 Communications Inc. (LVLT) are making return engagements,
having been on the 18-year-old Nasdaq 100 in the past but kicked out because
they got too small.
The deletions are Ciena Corp. (CIEN), Brocade Communications Systems, Inc.
(BRCD), ADC Telecommunications (ADCT), LM Ericsson Co. (ERICY), Human Genome
Sciences Inc. (HGSI), ICOS Corp. (ICOS), Monster Worldwide Inc. (MNST) and RF
Micro Devices Inc. (RFMD).
The rebalancing of the Nasdaq 100 Index is closely watched because there is a
tracking stock connected to it - the QQQ, which has $21.6 billion in assets
linked to it.
That means portfolio managers who have their investments tied to the QQQs had
to buy the stocks that were added and sell those that have been removed, which
can cause volatility for the shares involved.
But at eight, the number of additions and deletions is relatively small this
year compared to past periods. For instance, in 2002 there were 15 names added
and another 15 taken off. In 2001 the number of shifts was 13, while in 2000
nine changes were made. In 1999 there were 15 additions and deletions. By
Karen Talley, Dow Jones Newswires; 201-938-5106;
karen.talley@dowjones.com
(END) Dow Jones Newswires
23-12-03 1800GMT(AP-DJ-12-23-03 1800GMT)
23dic03 18:00 GMT