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Strategies & Market Trends : LastShadow's Position Trading

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To: LastShadow who wrote (31850)	3/7/2000 8:17:00 AM
From: LastShadow	Read Replies (1) of 43080

Day Trader : Traders taking momentum investing to a new level in 2000. In the old days, the momentum players could usually count on no more than two days run in a hot stock before major profit-taking beat the issue back 35%-50%. The primary difference between then and now is that in those days the issues making triple-digit one day runs were usually garbage stocks, often times on the verge of insolvency. Oh how the times have changed. In this market it is not uncommon to come across a profitable, multi-billion market capitalization company on the "Big Up" list. For example, seeing recent Hewlett-Packard spin-off Agilent (A 159 7/8 +51 7/8) soar 48% on the session as momentum investors pile into the stock ahead of company's presentation tomorrow at the Optical Fiber Communications conference and following announcement this morning of a new optical switching solution. Agilent is a $70 bln market-cap company with a float of 65 million shares. Hence, it is not the type of stock that the online investor with $50,000 in capital is usually attracted to... There is a new breed of momentum investor in town. Only these guys/gals aren't nearly as fickle as the trigger-happy investors who helped make day trading the new national pastime. Instead of selling into the second day of a move, this new breed of momentum investor may actually decide to increase his position... What's behind this changing of the guard? Money. And lots of it... Mom and Pop have been pulling their retirement out of the Blue Chips and moving it into aggressive growth funds. Each day more investors being lured into tech funds by the spectacular year-to-date performances of the Nasdaq (+22%), SOX (+75%) and Biotech Index (70%). Professional day traders are picking up on this trend and are directing more of their capital towards quality stocks. What you are left with are huge market-cap companies experiencing 50% moves in one week or one day and price pullbacks that often last no longer than a few hours.

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