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Strategies & Market Trends : Tech Stock Options
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To: Joel Brussell who wrote (6771)4/3/1997 1:21:00 PM
From: Tom Trader   of 58727
 
>>But shorting the stocks that are breaking down or about seems to be the name of the game.

Hi Joel--I agree with you that if one believes that this market remains vulnerable, then the thing to do is to short the stocks that are breaking down. Interesting that you mentioned PSFT as a potential short--I have an order to short the stock at a little bit over the current bid price. I'll stop myself out, as always, if the trade begins to go against me--resistance at 40-42, should hold.

>>with the McCellan oscillator at such extemes we have to get some kind of rally

You are right that the the market is oversold and due a bounce--the real question is whether the bounce should be used as an opportunity to establish new short positions.

>>I personally think Id' rather buy murdered stocks where the news is already out and the technicals are favorable

Not sure that I'd agree with you--the problem with buying stocks that have broken down is that they could go a lot lower--after all, who'd have thought that APLX would be at 4 or MEDA at 7.

>>then buying the last of the generals (CSCO, MSFT<INTC).My guess these will break down much worse before the downmove is finished.

Buying the generals has the advantage that if there is a meaningful rally, the generals will participate. I agree with you that they'll come down as well if the correction continues.

Hope that you are doing well in this market.

Regards
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