STOCKS WITH ATTITUDE TEAM - FA/TA AND EVERYTHING ELSE Message Board

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Strategies & Market Trends : STOCKS WITH ATTITUDE TEAM - FA/TA AND EVERYTHING ELSE

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To: CENTrader who wrote (190)	12/14/1997 5:25:00 PM
From: David Smith	Read Replies (2) of 2377

Bill, in my first post I tried to outline some ways I believe groups of small investors (like the 56'ers) can compete successfully with the larger players in the market. First and most important, play price swings through postion trading stocks in the mid and large cap range. The recent action in MSFT is a perfect example, and would have been extremely profitable, safe and fairly predictable for a great 10-day position trade, both long and short. Tradeable patterns occur all the time in stocks like this and they are easy to spot by even a casual TA user. The key is to go for consistent singles and doubles, not homeruns...this is how MM's approach their inventory/position trades. When I see people throwing a chunk of cash into a $2 stock because they read on the internet that it's a "great long term investment", it makes me sad because the farther below $10 a stock's price, the more that factors OUTSIDE SIMPLE SUPPLY AND DEMAND come into play. Example: when BOSCF was recommended, it was obvious by the volume that a large number of 56 thread followers jumped into it right away. During the next day or two, when the price did not budge even with all the buying, there were numerous posts like "the MM's can't hold the price down much more with all this buying"...."the MM's will have to cover their shorts soon with all this buying pressure," etc. It was obvious to me that the dominant dealer in the stock had inventory to unload or was willing to short outright (and look at how incredibly profitable that was for the BOSCF dealers). This is ONLY ONE unique situation that can affect a penny stock...there are many others; thus the absurdity of using TA on which to base buying and selling decisions in these types of stocks. This type of thing doesn't happen with stocks like MSFT and INTC because the market is incredibly liquid. Why go to the plate with two strikes against you?

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