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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: erickerickson who wrote (24755)	5/17/2000 1:16:00 PM
From: StockHawk	Read Replies (1) \| Respond to of 54805

Erick, that was quite a post, especially comparing the relative impact of losing $10,000 as compared to being on the wrong end of an "ethnic cleansing". (Yes, I'm a few days behind in reading.) Market timing, individual stock timing and technical analysis are provocative topics. While I remain skeptical, I find it impossible to dismiss these ideas. I think your challenge: "Just give me ONE MONTH of FUTURE prices for any stock and I'll retire." misses an important point. The value of TA isn't to accurately predict a particular price on a particular day, but rather to uncover trends that may persist or repeat. Such information is yet another tool in the arsenal. We have many tools at our disposal, but none are always reliable. The metrics of the Gorilla Game are the tools most favored here, but other good and valuable tools, such as examination of cash flow, relative valuations (over time and against other stocks)are also useful. Likewise I find some basic TA tools to be useful also. I'll just mention one - moving averages. As you alluded to there are any number of moving average lines that can be plotted on a stock chart, 5 day, 10 day, 18 day, 28 day, 50 day etc. I've seen stock charts with so many lines they look like a plate of spaghetti. But do this, take any one of our gorilla stocks and view it with its 200 day moving average. You will find that these stocks trade above their 200 day averages almost all the time. However, the amount by which the price is above the 200 day average varies quite a bit, and when it becomes too great sometimes there are dramatic corrections. Often these corrections drop the stock back to the 200 day average. I think a gorilla stock trading near its 200 day average is pretty good time to buy. (QCOM is around there now.) Stocks like CSCO, INTC, SEBL have all been good buys at such times. But is not a law written in stone, its just one more indication to consider. And it does not always work, as we can see with MSFT which recently crashed through its 200 day average and continued to fall. One last point: any kind of analysis we do (technical or fundamental) is going to be looking at the past to predict the future. As we see every day, unpredictable things happen. A press release cites earnings concerns and a stock price dives or an acquisition or alliance is announced, etc. etc. No TA can predict such events. StockHawk