Cheng Xu, Following is a recent E-mail from Gottfried and my response which is relevant to your question.
>Paul, in case you missed it
exchange2000.com
Regards Gottfried<
>To: greenboy (4206 )
From: Darth Trader
Monday, Oct 20 1997 5:50PM EST
Reply #4208 of 4210
Talking head (Tom Dorsey) on CNBC just rec QNTM as being one of the only tech stocks
that he would buy now.<
Subject:
Thanks for your post/other
Date:
Mon, 20 Oct 1997 22:24:55 -0500
From:
"Paul L. VanHorn"
To:
Gottfried Mauersberger
Gottfried, I had not seen the post. Thanks.
>From DW Point and Figure Charts I did see a melt-down last Wednesday
when the Semi's sector had percentile rating of 58- and broke the double bottom at 45. However, in the past in what Tito calls the "yoyo" effect the stock has done the same thing in the past only to be what we call a shakeout prior to the stock resuming a new high.
In fact, DW, in my portfolio had a buy on AMAT as of last Wednesday. My only explanation for the high volume of AMAT on a down tic is--that the mutual funds who had a good run up rotated out of the stock going into the software and possiblly the network stocks. I will know for sure when I look at the Bull % Wednesday. The drop, I believe, took everyone by surprise--it appears that the big boys were wanting to bail out and justified their actions with the lower BTB data from the Aug BTB.
Someone BIG had to be buying the stocks in large amounts at these prices in order to be able to make the exchange. I did notice that the relative strength in the IBD todays Monday's issue had dropped from 94 to 12. I have never seen a stock drop that quick in relative strength, however, the IBD Industrial Price ranking had them ranked at a 5 for this last week and last Friday and, 1, three months ago.
I really wonder that if AMAT comes in with superior gains whether the
analyst will again discount the gains with language justifying they
previous actions, lower the pe and keep the price down.
From looking at my Dorsey Wright AMAT Point and Figure chart it
appears that the immediate Bull Support line is at $38. If it breaks
through and goes lower to $37 then the next Bull Resistant line is at
$33. This gives many of those who got in at a presplit purchase of the 20's substantial gains. IMO, I do not see the stock going into a big selloff from this point since the Mutual funds are the only ones I see who have the ability to come up with the cash and purchasing capacity to buy in such huge blocks or some some large stockholders like Soros, etc. It is interesting that the DW AMAT Charts at the end of the day on 10/17/97 had the Middle range at $49.00.
Am I overlooking something or is my logic faulty?
Gottfried, and others what are your thoughts?
Paul V. |
