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Technology Stocks : Y2K (Year 2000) Stocks: An Investment Discussion
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To: paul e thomas who wrote (11631)5/20/1998 12:48:00 AM
From: paul e thomas  Read Replies (1) of 13949
 
A TURNAROUND After a detailled study of the Worden Market Internals charts I feel confident that the beaten down stocks like the Y2K service companies will be rebounding very soon.IMRS is still more than 2 standard deviations below it's 40 day moving average. Yesterday the number of stocks below the 40 day moving average 2 sigma lower boundary dropped by nearly 1/3.I JUST DSCOVERED the percentage of stocks above or below 2 standard deviations from their 40 and 200 day moving average has been a leading indicator of the price movement for IMRS and other stocks that did well in the first 3 1/2 months of 1998. I believe many of the individual investors and Mutual funds who have taken significant % gains by selling positions in IMRS,CBSL etc. bought early in the first quarter will be adding significant buy side volume to the purchases that have made by the institutions that have believed in the longer term prospects and added to their positions in the last 4 weeks.If the price merely stabilizes the sell side volume being fed by margin calls should abate sharply.

I frankly had been really puzzeled about why so many Y2K stocks with strong fundamentals had done so poorly in the last 4 weeks despite strong first quarter results. I believe that price strength will return. We won't see PEG values above 2.0 again for IMRS and others but if IMRS returns to 1.5 by the time the next quarterly earnings issue a 36$ per share price is quite feasible.
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