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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Lyle Bean who wrote (54102)	7/30/1999 10:01:00 PM
From: Jenna	Read Replies (1) \| Respond to of 120523

IMHO the shorting is not a trend but a) a necessary evil after an earnings season,b) the result of a a better than expected FED report that launched the nets a bit too quickly c) the stocks that did a bit better like EXDS were EXTREMELY richly rewarded and the stock responded like gangbusters to the news of higher revenues but still no EPS growth.. I look it like a cycle.. Look at the topic of our thread' Stocks w/Strong Earnings & High Technical Rank. This is NOT your average shorters 'diet'.. But Lyle, good stocks get overextended, and hi-flying stocks get even more overextended. We are not putting the horse before the cart (i.e. I will short this company because I don't believe it can possibly justify themultiple and their product has no chance against the competition)...just the opposite. This is everyone's 'favorite" (EXDS was up to 140 and I still think its one of my top 25 stocks), but stocks need a little puncture, let the air out before it implodes altogether. I tried to short EXDS once and lost I tried a second time and got out a little too soon, but the third time I held the short 3 days and did better. I wish no harm to the stock.. Do you see me spouting statistical improbabilities of estimated growth? or saying extimated growth can never be sustained. no.. I simply look for exame the 3 moving averages, then I look at the Stochastic, I see a high stochastic and/or RSI, Klinger oscillator whatever that is above the top line start to slope a bit downwards. I see a stock that tries to puncture final resistance but falls back and wavers, Then I look to see is volume rising while the stock is beginning to hesitate? Is money flowing out of the stock? If it is I add another notch to my 'pro short' list. Is there a divergence between say EXDS making a 'new 14 day high' yet the RSI or On Balance volume is actually dipping down and not making a high at high, or are the MACD histogram bars starting to become shorter and shorter? Has the price already broken out of a consolidation, gone up about 10 points and what is next? Here is where I would step in if I see the Bollinger which has broken above the higher band and the next candlestick opens lower than the previous close and continues lower? is there a confirmation in that the RSI has now turned down and the stock is starting what is a "NORMAL" correction. That would be the time to step in and short. I actually think what should worry you is that not selling if these stocks go higher and waiting for the morning when the S&P futures are down over 10-20 points. and lossing 20 or more points in the first 5 minutes of trading. I went away about 2:00 on Wednesday, the gnets, ebays, and others were high. I said to close positions, I closed mine. I shorted EBAY EXDS, AMZN and a few others. I even wanted to short DISH and I'm sorry I didn't. I think you can't protect the stocks constant rise by worrying about shorters. THE TREND COMES FIRST, THE SHORT FOLLOWS THE TRIGGER GIVEN OFF BY THE CHART PATTERN OR INDICATOR. I'm not a 'niche' shorter but I make due. I do better with OEX but it is NOT Me that is driving the oex down but the panic, the news the worries etc. Paradoxically the nets move extremely high (i.e. CMTN, EXDS, CTIX) at any higher revenues so high that a short fall or correction is inevitable. The Techs fare better as strong stocks WITH EARNINGS like a QLGC, HLIT, SNDK, QCOM,HIFN can move for longer intervals because we are talking about quarter after quarter of sequential growth of EPS and not just revenue. which is why I don't tend to short the 'quality techs' as much. In many cases this time there was an oversold situation which added fuel to the conflagration of stocks like the ones mentioned. So in short, the trend IMHO is not a 'fad' or a 'strategy' but simply nets have reached the end of earnings seasons, the fed's not very sringent rise and no tightening had built in a 'uptrend' about 1 week to 10 days before the season. That is why I would not take a day withought trying to find a stock like NTK, or MMPT and CVS that is richly rewarded for BOTH higher growth and revenues and You have seen shorters really have no power, neither I nor you. Its the trend that dictates.. CREE has given me a handful of points and has gone into a downtrend, I didn't short but the chart did show a short was indicated. When a hi-flyer and I stress hi-flyer goes up 15-20% in one/two days its bound to drop unless the company discovered the cure for cancer or a youth serum. STMP is up one day 4 points and down 3 the next day. I had some pretty benign stocks on the watch lists today that were uphttp://quote.yahoo.com/q?s=wfmi%2Cexpd%2Calsi%2Cbebe%2CUSfs%2C+MZON%2Czqk%2Cnxcd%2Cmktw&d=v1 Some were higher intraday but the 'solid' stocks gave better than average gains while the high flyers were down ( I expected that which is why the list was a littl more conservative).. How did I compensate? THE EARNINGS PLAYS.. MMPT + 7 7/8, MLNM, APA 2 3/16 ( 3 days of gains(, SGAI + 1 5/16, NFF + 1 1/4, MACR 15/16 in a good consecutive day swing trade. move even: MVSN, HIFN.. WHAT IS THE DIFFERENCE BETWEEN THESE AND SOME OF THE HIGH FLYING TECHS/NETS? The nets have had their days in the sun, their rebound had begun 1 week to 10 days before actual earnings becasue the FED's less tightening bias etc, so they had their gains.. Now compare stocks like this one: Nortek doubles earnings, surges past estimates SanDisk Corp. Posts 2Q EPS $0.19 vs. $0.04 - Hi/fn Inc. Posts $0.35 vs. $0.04 3Q EPS Harmonic Inc. Posts 2Q EPS $0.25 vs. $0.25 Loss - QUALCOMM Reports Third Fiscal Quarter Revenues of $1 Billion; - Operating Earnings Per Share of $.75, Excluding Non-Recurring Charges - Black Box Corporation Reports Record Revenues and Strong Profits and Cashflow for First Quarter Fiscal 2000 There is no 'trend' to short there are just blatant differences between earnings from the stocks above to the stocks like AMZN, YHOO, ABOV, etc... so they lend themselves more to shorting... This is just my opinion. Having a stock have 'less of a loss' is not quite the same as a stock that goes from a loss of $0.25 to a gain or $0.25 ePS.. Don't get me wrong I love the nets, but they are just more extended than some of the techs that have already proven themselves especially when they are themselves oversold.