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Novellus - NVLS - close: 23.66 change: -0.21 stop: 25.01

Company Description:
Novellus Systems, Inc., an S&P 500 company, manufactures, markets and services advanced deposition, surface preparation and chemical mechanical planarization equipment for today's advanced integrated circuits. Our products are designed for high-volume production of advanced, leading-edge semiconductor devices at the lowest possible cost. Headquartered in San Jose, Calif., with subsidiaries throughout the United States, as well as in the United Kingdom, France, Germany, the Netherlands, Ireland, Israel, Italy, India, China, Japan, Korea, Malaysia, Singapore and Taiwan. (source: company press release)

Why We Like It:
Technology stocks, especially semiconductor stocks, look poised to begin a new leg lower. The SOX index is trading right near precarious support and the NASDAQ Composite is barely holding on to the 1900 level. Likewise shares of NVLS have been consolidating mostly sideways above the $23.50 region. Is this a new "bottom" or is NVLS merely biding its time as bears rest up for another round? Currently the Point & Figure chart for the SOX is bearish. NVLS also has a bearish P&F chart that currently points to a $17.00 target. Short-term technical oscillators on NVLS are bearish and the daily chart shows a breakdown under its multi-month trendline of support. Tomorrow is an important day for chip companies or at least their stock prices as Wall Street waits for the latest semiconductor billings data. If the data is positive then NVLS and the SOX are likely to rebound. If negative then chip stocks should begin their next leg lower. That's why we want to use a TRIGGER to open the play in NVLS. If shares of NVLS trades at $23.40 or below then we'll open the play as a short. Our target is the $20.50-20.00 range. Our time frame is six weeks.

Picked on April xx at $xx.xx <-- see TRIGGER
Change since picked: - 0.00
Earnings Date 04/18/05 (confirmed)
Average Daily Volume: 4.0 million

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