Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 326.13

+2.2%

2:34 PM EST

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To: Gottfried who wrote (58486)	1/7/2002 11:33:21 PM
From: Return to Sender	Read Replies (4) of 70976

The Goldman Sachs Semiconductor Index (Thanks AD!) may provide a decent selection of semiconductor stocks from which to choose potential trading vehicles. mobydata.com It consists of the following stocks: ADPT AMD ALTR ADI AMAT AMCC ARW ASML ATML ATML AVT BRCM CNXT INTC JBL LRCX LSCC LLTC LSI MXIM MCHP MU MOT NSM NVLS QLGC RMBS RFMD STM TXN VTSS XLNX Yahoo Detailed Quotes: finance.yahoo.com I believe that in order to profit from swing trading it is imperative to trade with the movements of the most recognizable index associated with the particular industry. In this case the Philadelphia Semiconductor Index is the most widely followed industry index. Below you will find a chart provided by StockCharts.com: stockcharts.com[h,a]daclyymy[pb50!b200!d20,2][vc60][iUb14!La12,26,9!Lk14] Paying close attention to previous highs and lows on the RSI (relative strength) of an individual stock along with the stocks Bollinger Bands can provide guidelines for predicting future stock movements. Although the semiconductor industry has risen greater than 50% the last three months providing the best performance of any industry during that period stocks within the industry will surely rise further with additional proof of a recovery in the industry. Short term the SOX has found overhead resistance at essentially 600. In order for the vast majority of semiconductor stocks to advance further the SOX must continue to rise. Having failed to do so the last two days further losses seem likely. If this is true than finding the stocks within the industry that might outperform the SOX when it does break out would be ideal. How might this be accomplished? There are no easy answers. However we can use technical analysis and basic chart reading to help us find those stocks that are volatile enough to offer excellent percentage gains within a short period of time. For instance AMAT has offered this investor the opportunity to take a better than 10% gain twice in the last month on long investments by simply buying the stock when it like the SOX turned positive after trading on weakness. Indeed looking at AMAT in comparison with the SOX one will find it is basically a mirror. Not all the stocks in the industry are members of either the SOX or the Goldman Sachs Semiconductor Index. Some will outperform and some will not but finding stocks that swing a greater percentage is more important than finding mere dollar or point gains. A stock trading at the lower end of its trading range when the SOX turns positive may have more of a percentage gain ahead of it than one that has already seen a great deal of strength. An individual willing to do some work can compare the action of any individual stock to the index to which it is most closely related using BigCharts (Thanks Gottfried): bigcharts.marketwatch.com Once an economic recovery is no longer in question the SOX could easily trade along the upper Bollinger Band for an extended period of time. So far that has not happened. So our mission is to find trading vehicles within this industry which once they become oversold can be expected to give us greater percentage gains than AMAT or the SOX. In order to accomplish this I first run a screen here at Silicon Investor looking for oversold stocks within the industry. Select advanced screen, industry semiconductors, technical criteria 20% RSI Maximum. siliconinvestor.com Tonight's screen shows no oversold stocks. A few short weeks ago there were 57 out of 200 semiconductors listed on this screen. In essence despite all the good news lately I would be hesitant to buy any new semiconductor position long at this time. Once a few more semiconductors show up as oversold we can look at the trading ranges, upper and lower Bollinger Bands and RSI of the individual stocks to determine if the stock has an opportunity to outperform the SOX and AMAT. RtS

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