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Technology Stocks : Jimbo's Playhouse/CPQ -- Ignore unavailable to you. Want to Upgrade?

To: Richie who wrote (5425)	12/16/1999 7:25:00 AM
From: Kenya AA	Read Replies (1) \| Respond to of 12662

Hi Richie: Congrats on your CMGI buy!!! Well done! I'm not very good on deciding when to sell either, but I can offer some food for thought as well as muddy the water a bit. <ggg> When do you know a run has lost it's steam? It depends on what you mean by "a run." Look at a 2 year chart. bigcharts.com If you had bought CMGI at the beginning of 1999, would you say that the spike to 165 in April was the end of "a run?" If so, according to O'Neill, the determining factor was that CMGI broke out of its upward channel line on heavy volume. The problem with the channel line break method now, though, is that it's pretty hard to draw channel lines on CMGI now because it's so stilty. Hmmmm. Decidely down on large volume? Maybe. But then you might have sold yesterday. <ggg> A breech in the 7 day EMVA? 7 day?? You're kidding! Where would be a good selling point for this stock? One rule of thumb is that once the stock breaks out of a cup base to new highs, it should run the same amount as the difference from the top of the base to the bottom. Using that theory, the top was 165ish and the bottom was 65ish - 100 points. Add that to the top of the base and you get 265. Hope this helps. <ggg> K

To: Richie who wrote (5425)	12/16/1999 8:26:00 AM
From: Kenya AA	Respond to of 12662

Richie and Thread: IBD's Investor's Corner column is usually has some pretty good info on buying and selling. They don't always put it out on their website, but here's the one from yesterday: Climax Runs Usually Lead To Stock's Peak Date :12/15/1999 Author :Ed Carson Copyright :Investor's Business Daily Sometimes, a rising stock will act like a jet fighter. The share price will kick on the afterburners and head straight up. That may be positive for someone selling into the big move. But it's not necessarily a positive sign for the future. Such a stock may be entering a climax run, a last burst into new highs before an abrupt reversal and dizzying plunge back to earth. Watch out for stocks that suddenly shift into higher gear after a long advance. During a climax run, a stock will surge ahead in heavy volume over several days or weeks. The share price will rise 50% or more. Sometimes at the end, the stock will post its biggest point gain of the entire run, often gapping up, on its strongest volume yet. This can form the climax top. Some of these stocks will turn tail and dive straight down. Others may try to fight back. But in either case, the stock crashes, often retracing 50% of its entire advance. What spurs a climax run? After a long advance, a stock may receive heavy media coverage. Ordinary investors and pedestrian pros jump on what looks like a can't-lose stock. That gives mutual funds and other institutions the liquidity they need to unload shares. Institutional demand drove the stock's pre-climax advance. Now, with the stock at nosebleed levels, the most clever institutions are long gone. When the buying frenzy stops, the share price falls like a rock. Then the stock took it up a notch, running up another 61% over the next seven sessions. On April 13, the stock gapped up 15 1/2 to 152 on its heaviest volume day yet. The next day, the stock rose to an intraday high, but closed down 12 1/4 in even heavier volume. After a few sharp declines, the stock tried to recover, but continued to slide. The stock now stands 50% off its high. After the fact, it's easy to see Schwab's climax. But spotting a top as it happens can be tricky. On Nov. 12, the stock jumped 50 points intraday, closing up 32 1/2 to 378 on very heavy volume. The next day, the stock hit an intraday high of 406 1/8, but closed down 10. But Qualcomm didn't die. After a four-week consolidation, the stock rose to a closing high Tuesday. Qualcomm and similar stocks have some experts scratching their heads. "We're a little bit in uncharted waters right now," said Mike Doran, president of Sierra Capital Management in Shingle Springs, Calif. Qualcomm didn't meet all the tests for a climax. The Nov. 13 jump came on heavy volume, but not the heaviest of the entire run. Investors should stick to their sell rules. If you're divided over whether to hold a position, consider selling half of your position to lock in partial profits. "You've got to stay with your system. If you see the signals are there, you can't go too wrong taking a big profit," Doran noted.