Morning all,
Someone just PM'd with a question in regards to which stocks I generally turn to when I see the NAS bottoming out and want to go long. I believe I listed some top tier stocks last week and mentioned BRCM, PMCS, and RBAK at the top of that list: finance.yahoo.com. That been said you should pick ones that you know intimately well and get some feel to whether they will lead, duplicate or lag the NAZ. I stated 2600 was support and was willing to hedge that by closing shorts and buying these three stocks for a nice gain. JNPR has gone from a leader to lagger and so Monday I may pick some of it up too on any rally in the NAS:http://finance.yahoo.com/q?s=jnpr&d=5d. In fact Friday end of day would have been a great time to pick some up too for the AM GAP. Always keep your eyes on the charts, and watch volume. I still like JDSU/SDLI, AETH, FDRY, MERQ ARBA EMLX among many others but feel they are now at second tier level:http://finance.yahoo.com/q?s=JDSU+SDLI%2C+AETH%2C+FDRY%2C+MERQ+ARBA+EMLX+&d=5d. Caught Cramers article on BRCM, nice to know he followed my advice last week:
Don't Take a Big Stock-Price Move for Granted
By James J. Cramer
Originally posted at 8:09 AM ET 12/15/00 on RealMoney.com
Those of us who grew up in the era where stocks moved a point or two a week are still trying to get over the price explosion that we have seen in the last few years. Those of you who just started in this game at the turn of the last century take these price movements as a given.
So, we end up speaking to each other at cross purposes. Last night I was sifting through my endless email, taking heat from my wife (who wanted me to read to the kids) and getting steamed about readers who want to know how I could like Broadcom last week and dislike it this week.
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I wanted to reach out to these folks and shake them and say, "If you trade Kimberly-Clark, as I do, and it suddenly went up 50 points, believe me you would take some profits." In fact, you would hate the stock. But that kind of stock behavior is tolerated in Broadcom and people say, "Hey, 50 points up, that's nothing, why take it?" That's crazy. You are wrong. I am right.
A stock that goes up 50 points in a week becomes a different stock. It goes from being cheap to expensive. I don't care how long it takes that trip, it has traversed from something I want to own to something I don't want to own. And don't give me any of that tax !#@#$!. Not after what we have been through in 2000. I know thousands of people who wish they had gains to pay taxes on.
So stop wondering what got into my head that I liked Ariba at 55 and hated it at 85. Where I come from, those are still giant moves. More than ever. I don't sit here and think, "Oh my, that is inconsistent with what I wrote about Broadcom last week." I sit here and I think, "That price is inconsistent with what I would pay for Broadcom now vs. last week. It is the same company."
These gains used to be only the province of stocks that got takeover bids. Now sheer momentum pushes them higher. When I catch a 50-point move in a stock these days, I don't try to give the gift horse braces or root canal or even a tooth-whitening. I just thank the gift horse and take the gain. |
