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April 20, 2000

The

Nasdaq

remains oversold. Even a few days of "down" will not change that, as next week we will be "dropping" some very large negative numbers on this

oscillator, continuing to work off the oversold condition.

It's important to note that any rally we see in the Nasdaq is not a sustainable rally. It's an oversold rally. And a market that rallies just because it's oversold is not sustainable. A market that made a bottom, did a lot of work and was oversold would provide a sustainable rally. The Nasdaq isn't close to having completed the work necessary for such a sustainable rally.

The damage that has been done won't change with one rally off the lows. Since I'm subject to using the charts that the computer generates, the example of

TheStreet Recommends

Intel

(INTC) - Get Intel Corporation Report

does not show as well as I'd like, but it will do in a pinch. See the entire sideways move Intel had in mid-1995 through mid-1996? That's one year of base building. Then we saw similar action from 1997 through mid-1998 before the company resumed its rise. During these corrective phases, Intel fell as much as 50%. But it's the time factor that's key here: Take note of how much time Intel has spent correcting during these five years.

And even in this fast-paced, high-speed Internet world we live in, there is no substitute for time.

Overbought/Oversold Oscillators

Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At time of publication, she held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at

KPMHSM@aol.com.