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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Jerry Olson who wrote (103803)6/22/2000 4:49:00 PM
From: Jenna  Read Replies (3) of 120523
 
For days like today, Market Direction Analysis is more important than what stock you choose for a day or swing trade. Early morning trades were fine until about noon time. My shorts were strong most of the session (TLGD, AKAM, MU, FIBR) and strengthened more at 2:30 so I let my shorts run (most of them) and finished taking profits on MOST but NOT all long positions. At mid day I usually check the trends of the market indicators. By 2:36 the trend turned and I continued with my short positions and made no more long plays until VLNC which was a 'play on possible gapper'... not a real trend there but a possibility of one.

Another mistake is holding too many short positions because you see the market is down 126.. that is a mistake because the ones down the most could recover on a morning rally. What I do is close most short positions but leave a little on 'special stocks'.. In this case special were stocks that might play on 'earnings' - MU and SMTC which I already had for a long play and I'm expecting a reversal of the latest uptrend. So in reality it may be a short position but its a stock that has not run down much during the day but rather has a 'short potential' for a marked moved down in front of it and not behind it. Strong stocks like NEWP, ELNT, KEI, SMTC, SSTI and TLGD just don't correct that much. They usually come back like gangbusters after 1-2 down sessions.

That is also why I chose to cover MERX near the close and go long at the close. It might be too soon but tomorrow will tell.

I just don't like shorting a prior strong stock like TLGD, SMTC, SSTI or KANA that is already down 10% during the session. TLGD and KANA is a good short while you can watch it intraday and not overnight. SMTC might be okay as its well off the highs of the day. I'd rather short a strong stock that is well off its session highs after a 1-3 day strong gain hoping for the exhaustion of the uptrend to continue tomorrow and perhaps lead to another 10% profit in the direction of the trade (in this case short)

Most of all I don't like to waste time with 'junk'.. junk stocks are unpredictable and you usually have 'one-day wonders'.. I'd rather be in and out of my favorite 50 stocks that get stuck in a junk stock. Once in a while I'll pick up junk for a scalp, but invariably I return to my favorites for the real profits. You rarely get good swing trades from junk
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