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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 204.70-2.5%Jan 8 3:59 PM EST
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To: Jim McMannis who wrote (84767)7/12/2002 6:32:28 PM
From: tejek of 275872
 
RE:"its best not to do any real buying until the retest of the recent lows. That's likely to happen in the next two weeks. The real money won't move in til then."

How do you know this? Do you think AMD will hold recent lows?

Jim, its the gospel according to O'Neil of IBD and a few thousand other wall street pundits. Haven't you ever watch a stock hit a low and then go back a short time later and do a retest?

Its the same with the major indices. They hit a low, then they go thru a short period of higher highs and lows. Then, within two weeks of the initial low the indice will go back down and see if the low is holding. Then and only then, do we start to have a solid ramp with high volume.

Go back to the 9/21 low.....within 5 days after the low was made on the DOW and the Naz, there is another dip that doesn't go down quite as far. The dip is more pronounced on the Naz, than the DOW. After that, the ramp in both indices starts in earnest. Most large investors wait for that retest or the higher second low before they put a lot of their money to work.

I am surprised you didn't know that. I use the rule all the time with my stock trades when I am able to discipline myself. <g> Its doesn't work that way every time but it does more times than not. And when I am patient and wait for the retest, my trade usually goes much better. One caveat.......in this market nothing is working as well as it normally does.........the volatility is way too high.

ted
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