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

To: Richie who wrote (5428)	12/16/1999 10:11:00 AM
From: Kenya AA	Read Replies (1) \| Respond to of 12662

Richie: Often, when I'm not sure what to do, I sell half and keep half. <ggg> Good luck! K

To: Richie who wrote (5428)	12/17/1999 9:19:00 AM
From: Kenya AA	Respond to of 12662

Thread: IBD's Investor's Corner from Thursday .... Date :12/16/1999 Title :Quick 20% Gain Can Lead To Huge Advance When a stock breaks out of a base and racks up a quick gain, many investors feel tempted to sell and take a quick profit. In most cases, they should hold for even bigger gains. A sharp run-up from a sound base is a sign of strength. It could announce the debut of a prolonged advance. So rein in that natural instinct to sell for the fast buck. Such stocks may offer even bigger rewards to come. Long-term winners jump out of the gate quickly. The 95 top-performing small-cap stocks of 1996-97 took an average of five weeks to post 20% gains. That opened the door to an average gain of 421%. The faster the rise, the better. The 21 companies that rose 20% within one week went on to surge 484% on average. So don't let an explosive move out of a base scare you into selling. That fast riser could be the next Cisco or Dell. This forms the basis of the 20% rule. Let's say you buy a stock as it breaks above its pivot point. The stock subsequently rises 20% or more from its breakout point in eight weeks or less. You should hold it for at least another eight weeks. That's provided the stock does not fall more than 7% to 8% below your cost. Always protect yourself against big losses. Consider PC maker Compaq Computer, which cleared a five-month base on May 1, 1997. From its pivot of 17 1/2, the stock quickly advanced 27% in four weeks. Compaq pulled back 13% from its intraday high over the next three sessions in above-average volume. But investors who bought on the pivot still had a 10% profit. The stock camped out for four weeks, then took off again. By Sept. 22, 1997, the stock had climbed 128% from the May breakout. Recent "Investor's Corner" columns have discussed sell signals on trading volume, trend lines, moving averages and other clues. Over time, you'll develop a sense of when to sell or hold based on a stock's trading behavior. In general, give a bit more room to fast risers that meet the 20% rule. Looking back at Compaq, the stock broke below its 50-day average on Oct. 24, 1997, in heavy trading. The stock continued to trend lower until finding support at its 200-day. But Compaq wouldn't exceed its September 1997 high until December 1998. The quick 20% gain does carry a caveat these days. In this highflying market, a lot of Internet issues and other stocks are surging on good stories, not profits. They race up with childlike energy, only to tire out quickly and fall back home. Blowing out of a base and racking up big initial gains is still positive. It's just not the near-sure thing it used to be. That's why it's more important than ever to choose stocks with superior earnings and sales growth. Look for companies that are leading fast-growing industries. And they should be favorites among institutional investors.