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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Jenna who wrote (40323)5/15/1999 9:29:00 PM
From: Jenna   of 120523
 
What the beginning of next week will mean to traders. Anxiety COULD cause the Dow Jones to fall to 10,500 and Nasdaq Composite coult fall to 5,500 and 2,300. Anxiety will fuel the markets on Monday. In my opinion the place to be are in the financial stock PUTS and/or select earnings plays.

A larger market fall on Monday /Tues will probably convince the FED to leave things alone, but if there a tightening and there probably will be hints of one, the financial sector and all the 'fat' stocks like AMTD, EGRP, SCH, CMB and bank stocks that have risen and some that have become overbought could take the brunt of the fall. Any relief rally for that sector could be short lived.

Techs might rally in light of the pending earnings reports of AMAT, HWP, DELL and LCOS so I would take advantage of some daytrading in these sectors. Perhaps an overnight hold on a conservative option call position would be a good idea for some in that sector.

I would be careful about getting strongly into any tech stocks because of a possibly short lived rally due to the earnings reports. A good earnings report result can be enough to carry a stock for a day or two, but eventually they can get sucked into a general market malaise. Sure people were buying DELL on Friday near the close just look at any intraday candlestick chart. But how many of these buyers are traders doing no more than taking advantage of a 1-2 day relief rally and shorts running for cover on Monday/Tuesday if DELL/AMAT/HWP beat estimate. They will probably be out like a shot as soon as they've taken their profits.

Investors won't be entering the tech stocks in droves after Friday. I'm still going to keep my pre-Friday-selloff strategy. I stopped holding positions more than a day or two since BEFORE the last internet correction.

I'm not going to be looking to hi-profile, golden stocks but stocks resilient enough to withstand whatever comes. I'll be looking deeper into the earnings plays to even out the odds in our favor. I won't be averse to picking up more puts in the brokerages and select nets especially in the height of a relief rally.

I'll be using small cash positions of up to 10 calls/puts because these small positions can grow and if some of them don't it won't be a significant financial loss. I'm certainly not going to wait on the sidelines until things settle down. There will be too many opportunities arising from anxiety, panic and fear which is what fills the coffers of traders who know just how to cash in on that fear.

And I'm still counting on a rebound by Mid-June - Mid-July at the height of the next earnings season. If nets fall more now, the more they will rise by the earnings season.
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