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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (34997)	12/10/1999 2:09:00 PM
From: pater tenebrarum	Read Replies (3) \| Respond to of 99985

Joel, i believe my post may have created a mis-understanding. i am not COMPLETELY discounting FA, in fact i believe that ultimately stocks will always revert to valuations that are in keeping with fundamentals. however, in today's markets this principle has been suspended for quite some time due to the massive amounts of excess liquidity created by the Fed, which has found it's way into the stock market. this process of enormously accelerating money supply growth was coincident with the beginning of the vast stock market gains of recent years, which proves my point (just look at LT charts of money supply growth and superimpose the S&P). lately, a new element has been added, and that's the open ended fantasy called the internet. the psychological climate and the liquidity backdrop therefore have combined to create a massive speculative run, and one of the aspects of this run is the sell-off in the broad list of stocks to free up money for momentum 'investing'. this is an IDEAL climate to be mastered via TA...i am pretty certain most people can agree that today's stock market valuations have very little to do with fundamentals. there's a vast number of stocks out there that look fundamentally undervalued, counterbalanced by the narrow list of stocks discounting the hereafter. this is a situation where TA is much more helpful in arriving at proper trading decisions than FA. if you are patient and can afford to take a long term view, FA will surely provide you with some potential future winners. they're just not the winners of today. the example you cite sounds like an exception to the rule to me... regards, hb

To: Box-By-The-Riviera™ who wrote (34997)	12/10/1999 2:40:00 PM
From: jttmab	Respond to of 99985

but in this case the solid fundamental story would have kept you there for a rise of another 9 points or even higher since then I wouldn't necessarily agree that FA [the story] supports the movement of the stock. I'm sure anyone on this thread can cite numerous examples of price movements unsupportable on the basis of any FA on either side. I would suggest also that the last year especially, traditional TA has had it's shortcomings in picking tops. I would suggest that the dominant TA metric is momentum...or in terms understandable to the dentist and doctor day trader....the ticker XYZ will double because it doubled last week/month or because it split...Overbought conditions do not exist. I have seen dialogues on threads that point to a comparison between SUNW and DELL, claiming that the relative price movements correspond to some "market view" that SUNW will do remarkably better forward looking than DELL. QCOM, not a shabby performer this year....attributable to a sound Fundamental story? VA Linux? YHOO, AMZN? You don't really believe that PMTC is up today 7% because of a fundamental story do you? IMO, it's being bought because it went from 19 to 29; if a significant position decides to exit the traders will bail out of PMTC faster than they got in. Edit: Change "7%" to "nearly 8%"...guess I have to type faster. Edit 2...Damn make that over 9% jttmab jttmab

To: Box-By-The-Riviera™ who wrote (34997)	12/10/1999 6:24:00 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 99985

Saw your post and I hate to beat up on a new poster to the thread but knowing nothing about PMTC, I took a quick gander. First thing I noticed was the chart... You said it was screaming sell. I see a looooong consolidation period basing for a move up as it traded around 15 forever it seems. It then started a nice climb. I would have said TA said it would move as the bollinger bands were tighter than a ... well you know <g> Second you said solid FA made you buy it. From Yahoo's profile of the company... >>>>For the nine months ended 7/3/99, revenues rose 1% to $777.5 million. Net income before extraordinary item rose 26% to $76 million. Revenues reflect growth in the Company's installed customer base. Earnings also reflect the elimination of interest expense on the Computervision debt that was paid in the 2nd Qtr of 1998.<<< OK revenue only climbed 1% and that was from them getting rid of expenses, not necessarily real growth. I then looked at the PE ratio and had to figure it out myself since I couldn't believe what Yahoo showed.. OH MY GOD it is right!!! A PE Ratio of over 63 on growth of 1%. I have to thank you for showing me this stock. I will do more research to be sure but if this isn't a screaming short, I don't know what is. What am I missing????????? Seriously, post here or PM me and explain what I didn't see in my 30 second look at this. Good Luck, Lee