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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: Jerry Olson who wrote (16621)10/9/1998 2:19:00 PM
From: Jenna  Read Replies (4) of 120523
 
AMMB+85%!,ITWO+17% PVN +12%,CEFT +18%..My "Fear,Destruction...Repair" Theory.

A little 'rule of thumb' here. There are no fundamental/technical indicators that 'push' these stocks to the top of my watchlist rather than others that meet the stringent criteria. Technical indicators signal 'buys' yes, but what propels them onto the top my watch list is more based on the 'fear and destruction and and repair factor. That is investors 'fear' that their stock will be hurt from competition, law suits, global influence, which causes the stock to 'destruct'..(VRTS,CEFT,PVN) It's usually a matter of 1 to 3 days before the stock enters a 'repair' period. Repair could last from 1-3 sessions. Investors begin to rethink their sudden retreat and some come back and traders are ready to pounce.

2) Fear..Destruct (earnings shortfall)..repair
The second is similar to the first except that the stock destructs because of a valid reason whether it be earnings shortfall, irregularity in forecasting EPS etc.. This stock also goes through a repair. Not as widespread as the first but still a 10% plus repair.

Either way you add to these ingredients a market 'rally' and you have the formula for intraday profits of 10% plus... I'd rather make 2 points on a 15 dollar stock than 2 points on a 50 dollar stock so that is why I keep on repeating to watch those beaten down little ones. (They were once big ones)
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