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Technology Stocks : Data Dimensions

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To: TA Trader who wrote (2812)	8/20/1997 10:04:00 PM
From: TA Trader	of 4571

FWIW Dept. Sunday night I posted that I expected the market to rally as early as Monday and we could then see what it's real direction was by looking at volume and breadth issues among others. So far this week we have rallied well over 300 points but all is not perfect. Today's advance was on lower volume and the bond market was weak. Translation? It looks like we need to do a little consolidation in here before moving higher or perhaps even lower. (Stiff will love that sentence!) Anyway, in the absence of a stronger bond market tomorrow, I expect the market to pull back and perhaps scare some into thinking that the rally is over and have it witness more sharp selling. Anyway, when one is of this opinion, what about DDIM? I am a firm believer in measured moves in both the market and individual stocks. For DDIM, in late July we rallied from 22 to 30 in 4 days. We then pulled back 4 points to just under 26 or 50% of the advance on lower volume which is important. Now we have advanced a little over 7 points from the lows on increased volume which is bullish and tomorrow we will most likely complete this measured move although right in here or somewhere between 33 and 34 is enough. These up moves mirrow themselves and raise the question can it continue higher from here. A review of the Stochastics and other momentum indicators indicate a slightly overbought condition that would warrant a little consolidation and pullback from this 33-34 level. My concern is that the DOW is ready to correct some so why not DDIM which is also poised. Here's some possible strategies if you believe this analysis. I am not selling in here but I do expect a pullback of up to 4 to 5 points. I am looking at the Sept. 30 and 35 calls. The 30 calls could get you 5 points and the 35's close to 3. These are excellent premiums and you could sell some of both against some or all of your position. If you lock in your long at 35 or 38 until the 3rd. Friday in Sept., that seems like a great return. You can always buy back the calls at a lower price if DDIM does pull back as I expect. Anyway, that is my strategy for tomorrow. Good Luck to All. What a Country!

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