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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Guy Gordon who wrote (1825)	11/7/1999 11:23:00 AM
From: zamboz	Read Replies (1) \| Respond to of 24042

RE: TA, JDSU, QCOM, trendlines and channels Blow-off tops. DELL's spike to 55 is another example. The question is how long will it take such a fast growing company as JDSU to consolidate.

To: Guy Gordon who wrote (1825)	11/7/1999 11:37:00 AM
From: Kayaker	Read Replies (1) \| Respond to of 24042

Another strategy would be to sell deep in-the-money covered calls. For example, you could sell the Nov or Dec $150 call for about $50 per share. (Deep calls usually sell for near the difference between the stock price and the strike price.) Then you buy back the call before expiration. The idea here is that you are selling to top of the stock -- you are selling all the stock movement above the strike price. If the stock goes up or down you don't make or lose money. That looks like an appealing strategy, particularly in a situation where you have a strong feeling that the stock or the overall market is headed for a downturn. Basically, you're sitting on the sidelines without having to sell your shares. It doesn't really appeal to me right now with JDSU though. I suspect we are headed for a downturn (possibly starting tomorrow) but the future looks bright, so I don't have a need to protect the short term. For a different stock that I had less confidence in, I would seriously consider it.

To: Guy Gordon who wrote (1825)	11/7/1999 12:09:00 PM
From: Guy Gordon	Read Replies (2) \| Respond to of 24042

TA, JDSU, QCOM, trendlines and channels - continued. Just one more chart I want to show you. Here is NITE. white-crane.com As you can see, NITE was riding an up-trending channel from Oct 1998 through May of 1999. I got out when it fell off the channel, and thus avoided the drop from $53 to $22. During that time (May - Nov), NITE was in a down-trending channel, that it has now broken out of to the upside. I'm considering buying NITE after it pulls back to its 26-day MA. And just to show everyone that I can't follow my own rules, look at the buy and sell arrows on the chart. You'll see that I bought on the trendline at $33, and then sold at $56. Good move -- 70% profit. Then NITE fell back to the trendline in only four or five days. It bounced so fast I missed getting back in. That's when greed struck. The damned stock kept going up, and I was being left behind! I wanted my stock back. I was missing out on a great story. Articles started appearing about how NITE was the future of stock trading. Angels were singing it's praise. I bought back at $80. The gods punish our vices. I had bought NITE at the all-time record high. Worse yet, my stop-loss had to be at the bottom of the channel. I proceeded to watch my investment dwindle by 35% before I finally got out at $52. I lost everything I had made in the first trade -- and we're not talkin' chicken-feed here, folks. Thank god I came to my senses. If I hadn't sold when NITE broke the channel, I would have seen my $80 stock fall to $22! Who among us is strong enough not to sell sometime in the midst of a 75% loss? This is why you must strive to separate emotion from investing. If you buy on greed and sell on fear you will lose big-time. Trendlines and channels can help you make investing decisions that are less emotional. Here's what I strive to do: 1. Find good companies with up-trending stocks. Your friends on Silicon Investor can point you to good stocks. Don't listen to cheerleading, but check out the stocks for yourself. Investor's Business Daily has given me my best finds. 2. Don't buy story stocks. Insist on earnings, or at least the prospect of earnings in the near future. The best stocks I've found have trailing losses, but earnings for one or two quarters, and expectations for the future. 3. Find stocks that are trading inside a channel. This means predictablity. No, it's not perfect. But it's the best you'll get from the stock market. 4. Buy near the bottom of the channel. Don't get greedy and try to get the very best price ever. Close is good enough. When you look back in six months that one dollar or two won't seem like much. 5. Don't chase stocks. If you missed one, forget it. Let it come back down to you. They do, you know. 6. Put a mental stop just below the channel, and move it up every day. This is why you must obey rules 4&5. If you buy near the bottom of the channel your stop will be less than 10% below your purchase price. That's all you can lose. 7. Hold stocks for the long-term. As long as they're on an up-trending channel. When a stock falls out of the channel -- sell. Never move your mental stop down. Only up with the channel. 8. When a stock hits the top of the channel, be cautious. I don't say sell. Lots of stocks ride along the top of their channel for months. Watch for signals of a down-turn, and then protect your investment. Or just hold -- so long as you realize that the stock will eventually return to the bottom of the channel. There's nothing wrong with holding in this case. Just don't panic and sell at the bottom of the channel. That's when you should be buying, not selling. 9. When you feel great about your investments, that's when to be thinking about what to sell or protect. When you feel your worst, look for buying opportunities. OK. I'll shut up now. Just one more question: do you think I should write a book? :-)