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Strategies & Market Trends : Angels of Alchemy -- Ignore unavailable to you. Want to Upgrade?

To: Marshall001 who wrote (337)	5/25/2000 11:42:00 PM
From: tennessee_ted	Read Replies (1) \| Respond to of 24256

Marshall- about LUMT- Don't know anything about the stock, but I follow a few personal favorites that are kind of thinly traded like this one and its chart and end of day behavior would scare me into thinking twice about averaging down in this market climate. The stops being taken out do not look like they "snowballed" when you break the chart out into one minute segments. Just looks like a lot of selling, possibly a large position being sold off to "bargain hunters" and a bunch of folks just getting scared out of everything (perhaps with good reason). I also note that the bulk of the stops at 7 would have been triggered yesterday. I'm seeing a lot of beaten down low volume stocks just getting smacked up even worse, regardless of their numbers and prospects. I'm getting burned regularly by trying to pick up these bargains and am trying to stop doing it (they're just so tempting though!!! I also have a habit of doubling down on a loss I've just incurred so it only has to go halfway back up for me to bail). The market is whipsawing too much, and they just keep going further down. Just my opinion though, and since I really don't know squat about this company, you could wake up tomorrow to find the selling is over and normal price behavior will resume for it. But then again... By this time tomorrow, I hope to be all cash from about 70% now, except for that lottery ticket called TRAC, that looks worse every day. -Ted

To: Marshall001 who wrote (337)	5/26/2000 1:56:00 AM
From: SirRealist	Respond to of 24256

Two notes on LUMT: 1) It's been declining for a long time. While I agree that it's relatively undervalued, for the sector it's in, it burns a lot of money. Their last earnings indicates that's improving and that further improvements can be expected in coming quarters, as revenues ramp up. So I'd expect them to recover some ground nicely.... about Aug 4th, with the next earnings report. 2) For most stocks 9 months old or less that run big red ink, it is not sufficient to look at their all-time peak. The pattern I've seen, over and over, is look at the highest close in the first week of March. Look again at the highest close in the third week of March. Figure an 80% drop from those two points. For LUMT, that means the bottom is 5 or 4. I'd bail, dude. Rare strong companies avoid that. Rare weak companies go lower. But for most, this is the pattern I've seen in hundreds of cases. Use that as your guide. And for older companies, look back to the range between mid-October and end-October. Many will drop to someplace in that range. These are the patterns I use to gauge bottoms. In some cases, like ELON, new emergence of new technologies will keep them from sinking that low. For companies under 5 months old, gauging the bottoms is a crapshoot, though many seem to follow the 80% principle, IF they were around March 1st. Newer than that = tough call. Hope the rule holds up if we hit 2900; if so, any that drop lower might be the best buys when the mkt reverses.