"Mind is malleable."

-- Christina Nikolov

Name/Ticker: ASM International (ASMI)

Date: January 2, 2003

Opinion: Bearish

Current Price: $13.51

Target Price(s): $7.25, then possibly $6.40

Commentary:

Over the past three months, Wall Street's prognosticators lowered their 2003 earnings estimates for ASM International (ASMI) by 75%. Regardless, the shares are now 41% higher than they were three months ago and tout a p/e multiple of 57 based on fiscal 2003 projections.

We strongly believe that $14 is a very significant level, since three major reversals commenced from that vicinity as far back as November 2001. If you are looking for some more recent proof, then go no further than November and December of 2002. The peak of the head and shoulders top's left shoulder was at $14.27 and a failed rally attempt on December 5, 2002 stalled-out at $14.15. (see chart #1)

Over the next few months, we expect ASMI to eventually undercut neckline support at $11.50 and decline to several upside gaps created between $7.25 and $8.53 in mid October 2002. We would not be surprised to see the shares fall as low as $6.40.

To profit from this decline, we suggest the June 15 put (Symbol: IQBRC), which is currently offered at $4.00.



Chart(s):

#1) ASM International N.V. (ASMI) Four Month Daily Chart

Click the Chart for an Enlarged View

#2) ASM International N.V. (ASMI) Fourteen Month Daily Chart

Click the Chart for an Enlarged View