March 30, 2000

They're coming out of the woodwork now, all these

folks screaming, "Tech is overvalued, get out!" Did these guys just wake up? Tech has been overvalued for ages. Where were they a month ago when these stocks were much higher than they are now? Nowhere to be found.

But we can probably expect several more "crash predictions" in the coming weeks -- that's just the way it is. But extreme bearish sentiment helps make bottoms.

From a technical standpoint, there are good tech stocks and not-so-good tech stocks, just like there are improving Old Economy stocks and nonimproving Old Economy stocks. For the


to make a low we're confident in, there is no special level at which the average is buyable. For me it's a matter of positive divergences: I need to see evidence the selling is done, and that comes from positive divergences.

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So, let's begin with the important numbers. The most recent low on the Nasdaq was 4455 on March 16. The day before this low was made, the Nasdaq had 154 stocks making new lows. A positive divergence would occur if the Nasdaq broke 4455 and there were fewer than 154 stocks making new lows. It would be an even bigger plus if the overbought/oversold oscillator held at a higher low than this most recent reading. These are two indicators that would give us some positive divergences. An increase in volume would be helpful as well.

There was not a huge increase in stocks at new lows on the Nasdaq Wednesday (105 was the reading) and the oscillator, which has shown such little life on the upside, barely budged on the downside. And of course the

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bearish percentage, a contrary indicator, nudged up to 29.4% this week from 26.4% last week. So maybe, just maybe, we're heading in the right direction.

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 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