Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: stockman_scott who wrote (25046)	8/24/1998 6:20:00 PM
From: Bull RidaH	Read Replies (2) of 94695

S. Scott, "Shorting DELL is the most dangerous thing you can do" I agree that one has to pick their spots carefully on the short side. I've been in and out about 10 times on the long side over the past year. Hoewever, this chart pattern is a highly reliable reversal pattern, that generally leads to a harsh drop in a stock or index when it arises. I will relinquish the bear case if the stock closes above 123 twice. Otherwise, the short opportunity seems fit to order. And I will convert to long once my target prices are met, as Dell's long term prospects remain bright. But it looks like the visibility over the next couple years could become more limited with cut backs in capital spending growth during the early stages of the forthcoming slowdown. With a forward P/E of 44, I don't believe the stock's price has made the adjustment yet. The stock has had a great run, but keep in mind that serious corrections have arisen recently in this stock (10/97-12/97 [32.7%] & 5/98-6/98 [21.5%]), proving that it is not immune from nasty pullbacks. Regards, David

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