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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: 16yearcycle who wrote (43158)	3/5/2001 9:30:51 PM
From: Jacob Snyder	Read Replies (2) \| Respond to of 70976

You chose the 200Week Moving Average for AMAT, because that is the MA where the stock bounced when it was out of favor in earlier years. Other than that, there is nothing special about that particular moving average. My point is that, if you had chozen the longterm moving average at which CSCO bounced the last 3 times, you would have bought CSCO (or, worse, bought out-of-the-money LEAPs), in the mid-40s. And, on the daily chart, CSCO even bounced a couple of times at 45, over the course of a couple of months. Again, this is analagous to AMAT bouncing at 40. And, you are right, AMAT is not CSCO. Until very recently, CSCO was considered a much higher quality company than AMAT. So, using the exact same thought process that led you to buy AMAT LEAPs when the stock bounced at 40, would have been disastrous if you had used it with CSCO. I'm not saying the same thing is going to happen to AMAT (quickly get chopped in half after falling through the moving average that the stock had bounced at for the last 3 downturns). But I am providing a counter-example. I do think you have made a lot of good posts in the past. So......are there any other reasons you chose to buy AMAT LEAPs when the stock hit 40 recently? I assume, from your post, that this is a longer-term investment, not a quick trade.