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Politics : Formerly About Applied Materials
AMAT 249.89+3.1%Nov 26 3:59 PM EST
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To: Ian@SI who wrote (30467)5/20/1999 11:44:00 PM
From: Jerome  Read Replies (3) of 70976
 
Risk/Reward Ratio. The report has a lot of credibility. Too much optimism on this thread has been based on the BTB Report. While other important other forces may hamper the upward momentum of AMAT's stock price.
1) The continued downward spiral of the internet stocks will result in a declining Nasdaq. All the sophisticated internet investors seeing their wealth greatly reduced will not be the first in line to buy any tech stocks.
2) The BTB now represents a three month moving average with shorter lead times, whereas the old BTB represented a one month average, with longer lead times. Supposedly this was done to smooth things out. But did it alter the very figures upon which so many of our assumptions are made. I don't know.
3)Everytime AMAT gets above 65 the feeling is that its going to 75 next week. Look at the 100 day chart of AMAT on SI. No need for bolinger bands, MA-CD, RS, Stochastics. Just write covered call at the 65 or 70 strike one month out. Eventually you will be called out, but the additional shares purchase with the call premium will more than make up the shares needed to refill your portfolio.
4)As Justa pointed out if the FED does even modestly raise interest rates we will all be admiring the new bottoms for AMAT and try to convince ourselves that this is a great buying opportunity.

Good Luck to all,

Jerome
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