Semtech (Nasdaq:SMTC) Message Board

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Technology Stocks : Semtech (Nasdaq:SMTC)

SMTC 75.30

+4.8%

Nov 10 3:59 PM EST

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To: Stu Bishop who wrote (962)	12/29/1999 12:37:00 PM
From: John Morrison	Read Replies (1) of 1225

Good question Stu -- because so much of what one reads on the internet is garbage just like we once got from some stock brokers. Study the chart, Stu to see if history gives you a clue to the future. Look at what the price does wrt (with respect to) the 50 day moving average, the 100 dma and the 200 dma. These are all potential support points. The crossing or near crossing of one dma over another is often significant. A 50 dma crossing from below the 200 dma and moving in a up slope is a positive signal. Each stock has its own characteristics which are evidenced as technical indications. Along with studying the chart, study the fundamentals. Read every piece of news and observe growth. Has this company been honest? Did their past public statements about the future prove true? Look at the revenue and earnings trend. Is it consistent? Plot a graph of the last 4 years revenue and earnings for each quarter. Use a spreadsheet's function to project the next quarter based upon the past quarters. When you do this, do you see a significant sequential quarter to quarter increase and do you see a significant increase compared with the same quarter a year ago? Semtech's next report will be late February. Will they report earnings that are about twice what they were last year? What does this analysis tell you about the next report? If it is very positive, then there is fundamental support for a price increase. Couple this with what you see technically and what do you get? Add in a third piece of information now, what are the Mutual Funds doing? The fourth piece of the pie is your consideration of what can go wrong? Thinking about these possibilities can help you weight the risks. Stocks don't always move alone -- they can influence a group and the market or they can be influenced by it. These influences can be the greatest risk. At times Semtech does well in bad markets. Look at history. Lots of money is now in stocks with very little fundamental value. They are driven by momentum investors based upon future prospects or "a story". When these stocks crash will money move to value stocks -- those with good revenue and earnings behind them. Semtech has a relatively small float at 30 million shares. It can make moves on small volume. Notice the first 5 minutes this morning when the stock moved down 2.5 on only 5800 shares. The 1st 3 transactions were above the ASK at 52.4375. This was 300, 200, and 300. The good news if you are long the stock is that it can move up on low volume too. Pay attention to the high volume days for significant accumulation and distribution. So study the data as I have suggested and reach your own conclusion on whether any price projection is or is not a hunch. Our president would say, "Well, it depends on what your definition of a hunch is."

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