Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: gaj who wrote (73851)	11/30/1999 9:22:00 PM
From: Jenna	Read Replies (2) of 120523

I have her book. Its good for when you want to find a stock that is having trouble meeting its debts or just running out of money for expansion, research or other reasons. Its a way to test for a stocks solvency rather than its shortability. Probably most of the stocks we follow today would fail her stringent criteria. Now even analysts are no longer looking only on EPS growth but revenue growth has been given equal (or at least mostly equal) footing for evaluating a stocks estimated growth, and determining its 'price' goals,even though its just less negative than last quarter. The only book you need is one that gives you guidelines (technical criteria) as to when a stock is technically EXTREMELY overbought and to start watching for signals of weakness in the uptrend. For me its unusual quick and high spiking above the upper Bollinger Band. I usually use about 4-5 trend indicators including a statistical analysis of volatility (historical versus volatility now), linear regression and r-squared. In order to determine if a stock is overbought you have to compare it to itself and not to a 'mean' standard. Those never work. What is overbought for ZLC is not overbought for QCOM or JDSU. What is average daily volatility for ZLC is not comparable to average daily volatility for QCOM.. That is why its good to start with a trading channel for any stock.. the range will encompass its own 'average' trading range and fluctuations can be seen more easily You don't have to short it then and there but begin looking for signs of consolidation, loss of volume, eventual shorter bars (10 or 5 minute bars or end of day bars), range contraction, Trend indicators dropping off and sloping downwards, signs of open and close being the same indicating even balance between supply and demand.. etc. Then wait for some sign of bearish flag signals or any signs that the consolidation after the spike will resolve itself to a breakout to the downside.. I would short it even during the consolidation with a stop at the bar before the consolidation. This is to protect you if the stock decided to surge once again the stop right at the last uptrending (bullish) bar will cover your short position.

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