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Technology Stocks : Xicor ? -- Ignore unavailable to you. Want to Upgrade?

To: Paul Weiss who wrote (2256)	7/6/1999 3:08:00 PM
From: steve olivier	Read Replies (1) \| Respond to of 2920

Well well, we are at least on someone's radar. Read down towards the bottom. Markets and Moving Averages By Helene Meisler Special to TheStreet.com 7/6/99 9:49 AM ET July 6 Moving averages are often used in technical analysis. While some folks favor short-term moving averages, others may choose to use longer-term lines. Still others prefer to use more than one at a time, hoping they will provide a signal as to direction when they intersect. Like many, I use moving averages to determine many different aspects of the market. I rarely use moving averages when I look at stocks. This is not to discard their usefulness; it is simply my own particular style. However, I do use moving averages in a variety of ways with regard to various market indicators. Basically, a moving average is the average price paid for a particular instrument over a particular period of time. The 200-day moving average is probably the most well-known and most-used moving average. Its time frame approximates just shy of one year in the market. When I look at the charts of the major averages, I typically also look at the 200-day moving average. Since a 200-day moving average encompasses such a long time span, it takes a lot of time to change this moving average's direction. (Yes, price can move it as well, but more often than not, this average moves quite slowly and it would take a very large price movement to turn a long-term moving average's direction.) I believe direction is important when using a moving average. Is it heading up or down? I think of it as a momentum gauge. Typically, when a long-term moving average line has been heading in one direction for an extended period of time and then changes direction, it is meaningful. Think of it as a rate of change. If prices are higher today than 200 days ago, then this moving average will be heading up, providing a meaningful change in market direction. Recently, the 200-day moving average of the yield on the 30-year Treasury bond has changed direction. After several years of declining, this moving average curled under and began heading upward in April. You can see on the chart that once the yield crossed the moving average, it sprinted higher without much difficulty. Yield on 30-Year Treasury Bond I like charts to have somewhat symmetrical patterns. See that little dip down last summer (marked "A" on the left side of the chart)? Then see the dip down this spring (marked "A" on the right side of the chart)? While not symmetrical, the moves resemble each other. Now take a look at the dip down in January 1998 (point "B" on the left side). This interest-rate chart will likely have some sort of dip down in the near future (point "B?" on the right side of the chart) in order to resemble the dip it took nearly 18 months ago, providing more symmetry to the bottoming chart. Basically, this chart says it needs a rest. There is plenty of resistance overhead (on the longer-term chart) in this low 6% area. However, the rising 200-day moving average line tells me a move down or a consolidation here will turn into a resting spot before the chart moves higher. In keeping with the longer-term theme today, I spent the weekend perusing the book of long-term weekly Nasdaq charts. There were several stocks emerging from extended bases. (Please use the Tools section of TheStreet.com to access these charts. To view, it's best to use a two-year, weekly chart.) One of my favorites was Sybase (SYBS:Nasdaq). Since before the big decline last summer, this stock was already out of favor. For 18 months, this stock has been building a base. It's got some resistance at 12, but it's easy to see this stock back at 20 over time. Another interesting chart is PRI Automation (PRIA:Nasdaq). Also a very big base, but in addition, we can draw in a downtrend line beginning with the highs in September 1997 in the high 50s, connecting the January highs of this year (just over 40). See the big volume one month ago on the rally from 25 to 40? It's been followed by a consolidation that says the next move through 40 will surpass this recent high and break the downtrend line at the same time. That will be bullish. I also took a liking to Xicor (XICO:Nasdaq). I don't usually like these single-digit stocks, but I could not ignore this chart. An 18-month base, but more important is the volume on this rise from 1 1/2 to 4 1/2. This is a stock on the move.