Techs Power Ahead

In terms of economic data this week is going to be the busiest of the month. So I expect market volatility to be high. To me this is a signal that this week may not be a good one to get in and out of positions, since many stocks are likely to oscillate more to market sentiment than to firm-specific issues. It is a week to stay cool, calm and collected unless compelled by an external force – meaning firm-specific issues – to act otherwise.

In the absence of economic data today techs benefit mainly from positive analysts sentiment. So of the indices the Nasdaq gets off to the most auspicious start on regular consolidated volume around the 4 billion mark. The rest of the week matters more than today to Wall Street though. In the greater scheme of things today is just the calm before the week storm.

Today, the folio starts to trade with NHP, a health-care real estate investment trust (REIT). After several weeks of research NHP seems to me one of the best health-care REITs out there in terms of transparency, diversity of revenue base and operators, dependency on Medicare and Medicaid, and operating fundamentals.

I believe a health-care REIT is a better way to play the health-care sector than pharma, biotech or health-care operators. Pharma and biotech stocks tend to have wild price swings and top-lines often dependent on the success, or failure, of one or two drugs, just to name a few dislikes. Besides, the sectors are too esoteric for me.

As for health-care operators, I just feel it is better to own the landlord – the REIT that is paid rental income – than to own the tenant – the operator of properties leased from a REIT.

It seems investors have put the sudden resignation last week of ADBE’s CFO behind them. The stock resumes its uptrend today and may find support around the $40 level by the end of the week. After all, the firm has just entered a big product cycle, having just begun the shipment of Acrobat 8, its new internet formatting software.

Also, a new version of Creative Suite 3 (CS3), its software design tool – it includes the ubiquitous Flash technology - and ADBE’s most important product in terms of revenue generation is slated for release in May 2007. Expect ADBE to bring home the bacon going forward.